The Reserve Bank of Australia's (RBA) undertook actions in regards to their open market operation in the post global financial crisis environment to move financial markets towards greater stability. This was achieved by:
A) increasing the maturity of repos to reduce money pressure in the money market over the longer term.
B) increasing RBA holdings of non-government securities for use with repos due to the shortage of government securities
C) increasing the supply of deposits held by banks and other authorised deposit-taking institutions in their exchange settlement accounts held with the RBA.
D) All of the listed options are correct.

Question

Quizplus · Accepted Answer

All three options listed are correct in terms of the actions taken by RBA to promote greater stability in financial markets post-global financial crisis. By increasing the maturity of repos, RBA was able to reduce money pressure in the money market over the longer term. By increasing holdings of non-government securities for use with repos, RBA ensured that there was no shortage of collateral even when government securities were in short supply. Lastly, by increasing the supply of deposits held by banks and other authorised deposit-taking institutions in their exchange settlement accounts held with the RBA, RBA was able to improve liquidity in the financial system.

The Reserve Bank of Australia's (RBA) Undertook Actions in Regards