be encouraging as many payments as practicable to move onto that system. the next major frontier is to reduce the settlement risks of australian banks in their international transactions. this will be, if anything, more challenging than domestic rtgs has been, but some progress is being made internationally. i suspect that there is as much to be done to improve the efficiency of the australian payments system and the “ fairness ” of access arrangements to retail payments streams. the accc has recently found wanting the basis on which smaller players may negotiate participation in the eftpos system. i should emphasise that it will be the rba ’ s intention to adopt as light a regulatory touch as possible over the payments system. there has, after all, been a good deal of recent progress in reforming that system without the bank having explicit powers. we hope such progress will continue - - through the australian payments clearing association and other industry - based bodies. only where payments arrangements fall short of our efficiency and safety benchmarks - - and there are no serious attempts by the industry to rectify that position reasonably quickly - - will we embark on the path of prescriptive regulation. end piece it is a truism that change is always with us. but i suspect that banks face more than their fair share of it in coming years. i hope my remarks will be useful background for your speculation about the details of this change over the next couple of days.

for liquidity during that period of extreme uncertainty. graph 3 the composition of the balance sheet also reveals how the various monetary policy tools are being used. in the early stages of the pandemic, liquidity was supplied via omos and hence the domestic repo market, while the foreign exchange swap book was allowed to run off ( graph 4 ). there was also a sizeable increase attributable to the bank's purchases of government bonds. more recently the tff has played an increasing role ; most of banks'initial allowances were drawn down by the 30 september deadline for that part of the facility. at the same time, short - term repos have been rolling off. this change in the composition of the rba's balance sheet is clearly evident in the large rise in the average residual maturity of the assets held by the bank. this is consistent with the need for monetary policy support to be provided for some time given the economic outlook and the prospect of an extended period of high unemployment. graph 4 this perspective of balance sheet size and composition is useful for comparing our current suite of policy measures with the stimulus undertaken during the gfc. the reduction in the cash rate target was much larger during the gfc – 400 basis points compared with a reduction of 50 basis points this year. of course that reflects the fact that more recently the cash rate has been close to its effective lower bound. in both cases, the initial expansion in the balance sheet was in the order of 5 per cent of gdp. but in the current episode, the nature of the expansion has been quite different compared with the gfc. during the gfc the main focus of active balance sheet expansion ( which is evident in graph 4 ) was on satisfying the precautionary demand for short - term liquidity, while a deprecation in the australian dollar also boosted the value of the bank's foreign reserve assets. satisfying precautionary demand was also important in the early stages of the pandemic, but subsequently the mix of assets shifted to longer - term repos ( via the tff ) as well as government bonds. consequently, the breadth and the durability of the easing in financial conditions associated with these balance sheet tools has been greater now than was the case during the gfc. conclusion the bank is using a number of monetary policy tools as part of the package of measures adopted to support the economy through the pandemic. this means that the task of assessing the stance