the stability of the financial system and the delivery of essential financial services to the economy than any other type of financial institution. as i have already noted, mobile banking is already providing a partial substitute for the retail payments services of banks and could eventually challenge the dominance of banks in the provision of other types of services, including deposits. if so, prudential regulation which is focused on ensuring the soundness of the banking system may no longer be sufficient to protect the safety of customers ’ savings or the systemic stability of the financial system and the preservation of its critical functions. finally i want to stress the vital importance of carrying out high quality research on these issues. this is the only way we will improve our understanding of what is a very complex and rapidly changing phenomenon. i am pleased, therefore, that we will end this conference with a discussion on the directions of a future research agenda. i wish everyone a very productive conference. thank you for listening. bis central bankers ’ speeches

extent to which households choose to spend or save these higher incomes – and we are much less confident in that judgement. it is possible, for example, that households fortunate enough to have accumulated assets in recent years may choose to spend rather more than past relationships suggest. aggregate net wealth in the household sector has increased by 58 per cent in the past five years ( graph 13 ) – much more than incomes. that could pose upside risks to consumption. graph 13 household net wealth nominal, quarterly $ tr $ tr total consumer durables financial assets housing liabilities - 5 - 5 sources : abs ; rba. at the same time, other households, particularly the young, have been forced to cut their spending back sharply as real incomes have fallen ( graph 14 ). higher future real incomes may relax some of those constraints, allowing such households to increase their spending by more than historical relationships would suggest. but it is also possible that persistent uncertainty about the future may cause them to rebuild savings or pay down debt, posing downside risks to consumption. r e s e r v e b a n k o f au s t r a l i a graph 14 card spending growth by age group nominal, year - ended in four - week rolling average % % total population > 60 years 20 – 34 years - 5 m j s d m j s d m - 5 source : cba. these two - sided uncertainties about future saving behaviour are captured in two stylised profiles. one assumes that the saving ratio remains close to its relatively low current level ; the other assumes it picks up to around its longer term historical average ( graph 15 ). graph 15 consumption risks scenario * index index consumption per capita * * december quarter 2019 = 100 may smp aug smp lower consumption % household gross saving ratio * * * % higher consumption * scenario assumes exchange rate and policy path are fixed to august smp assumptions. * * population denominator adjusted to exclude international students. * * * outliers during the covid - 19 pandemic were truncated. sources : abs ; department of home affairs ; rba. as with the other judgements, it is notable that quite small differences in this assumption – well within historical ranges – produce materially different outcomes for inflation and unemployment ( graph 16 ). graph 16 consumption risks scenario * % unemployment rate 4. 8 trimmed mean inflation % 4. 5 lower consumption 4. 6 4. 0 aug smp 4. 4 higher consumption 4. 2 3. 5