be ‘ unquestionably strong '. standards covering financial market infrastructure were also strengthened and supervisory oversight increased. central counterparties ( ccps ) and securities settlement facilities generally performed well through the gfc. ccps in particular withstood the default of lehman brothers, although the complete resolution was complicated and took some time. this resulted in increasing regulatory pressure for securities and derivatives to be cleared through ccps, making them even more systemically important. regulatory oversight increased along with this increase in importance, with attention focused on risk management and loss absorbance capability of ccps, recovery plans and resolution in the event that the ccp was unable to recover. international work in this area is ongoing, with the fsb releasing a consultation paper on ccp resolution in february. as overseer of the stability of central counterparties in australia, the reserve bank has been applying these new standards to domestically operating ccps, the most prominent ones being the asx ccps for equities and derivatives. finally, there seems to be more willingness for regulators and policymakers to take action if they see risks building. prior to the gfc there was a school of thought that because asset price bubbles could not be detected in advance, it was better to clean up after any bust, rather than lean against the cycle with policy. this was not the only view, however, and some policymakers had argued for a number of years that there were indicators that could be used to detect financial imbalances and that in some circumstances policy settings should take these imbalances into account. 1 post - gfc, there has been some swing to this latter view. there is now more acceptance of the need to take action when system - wide risks are rising. this is reflected in the increasing use of what are commonly known as macroprudential policies. as my colleagues david orsmond and fiona price note in a bulletin article in december 2016, there is no universally accepted definition of macroprudential policy. 2 they define it as ‘ the use of prudential actions to contain risks that, if realised, could have widespread implications for the financial system as a whole as well as the real economy. ’ they also note that the use of such tools has increased in a number of countries post - gfc. 3 / 4 bis central bankers'speeches in australia, we see macroprudential policy as part and parcel of the financial stability framework. as we have set out on other occasions, the essence of

myself when i first came into this area a few months ago – has the way we look at financial stability changed since the gfc? while the basic way we look at financial stability has not changed, experience with the gfc reinforced the need to focus on system - wide issues. we need to spend time analysing them and thinking about whether policy responses might be required. we are still learning how best to do this. 1 bloxham, p, c kent and m robson ( 2010 ), asset prices, credit growth, monetary and other policies : an australian case study, rba research discussion paper no 2010 – 06. 2 orsmond, d and f price ( 2016 ), ‘ macroprudential policy frameworks and tools ’, rba bulletin, december, pp 75 – 86. 3 ellis l ( 2012 ), ‘ macroprudential policy : a suite of tools or a state of mind? ’, speech at paul woolley centre for the study of capital market dysfunctionality annual ; conference, sydney, 11 october. 4 rba ( reserve bank of australia ) ( 2014 ), financial stability review, september. 4 / 4 bis central bankers'speeches