on private capital flows and cross - country position - taking - - provide a response to this new element of the current problems - - the role of large - scale capital flows. what relevance is it to australia, and to this audience ( australian and overseas )? we acknowledge our stake in the outcome, with two - thirds of our exports going to east asia ( including japan ). australia is taking part in the imf - co - ordinated facilities for thailand, indonesia and korea. these funds help restore confidence and help the process of adjustment. we will use our relationships - - via our regional central bankers group emeap and, in due course, the newly - formed asian surveillance group - - to provide examples of how prudential systems work elsewhere, analysis of how the specifics might be done in particular countries, technical assistance where it can be useful, and - - the most difficult and subtle task of all - - understated and understanding support for the reform elements who have the task of fashioning a stronger financial sector. a last word directed specifically at this audience. some of you come from the countries involved : i wish you well in the vital task ahead. for the rest of us, is this, too, not a problem but rather an opportunity? the countries to our near north are going to be devoting considerable resources to strengthening their financial sectors. i hope some of you will find a role for yourselves in this process, and by doing so will look back on this as an opportunity to strengthen our links with our northern neighbours.

glenn stevens : overview of economic developments affecting australia opening statement by mr glenn stevens, governor of the reserve bank of australia, to the house of representatives standing committee on economics, brisbane, 20 august 2014. * * * chair members of the committee thank you for the opportunity to meet with you today. since the hearing in march, the global economy has continued its expansion at a moderate pace, and australia ’ s trading partner group has been growing at about its long - run average rate. with the abatement of the adverse winter weather, the us economy recovered in the june quarter and the labour market has continued to strengthen. growth in china has remained close to the target of 7. 5 per cent, though chinese residential property prices have declined in recent months. chinese authorities at various levels are responding to these developments with the aim of maintaining stable macroeconomic and monetary conditions. in japan, consumption and output grew strongly in the march quarter ahead of the increase in the consumption tax in april, and then contracted sharply in the june quarter. this is a normal pattern surrounding such tax changes, but complicates reading the underlying pace of japan ’ s economy. economic growth in the rest of east asia has continued. commodity prices important to australia have declined this year, as global supply – including from australia particularly – has increased. the terms of trade have now fallen by about 18 per cent from their extraordinary peak three years ago, but they remain over 50 per cent higher than their twentieth century trend level. perhaps the most remarkable feature of the international scene at present is the exceptionally low volatility of financial prices – the lowest observed over the past 25 years for sovereign bonds, equities and foreign exchange. yields on sovereign debt of the major countries are also very low, the lowest on record in some cases. spreads on investment grade and financial corporate bonds have reached multi - year lows and in europe yields on so - called “ peripheral ” sovereign bonds have in some cases fallen below previous historic lows. it is not as though there has been a dearth of geo - political or financial events which might ordinarily trigger more caution among investors. but compensation for risk on financial instruments remains scant. the reasons for these remarkable trends, including the extent to which they reflect the effects of the exceptional monetary policies being conducted by the major jurisdictions, or other things, could be debated at length. what is clear though is that a combination of forces has resulted in financial conditions remaining remarkably accommodative.