Reserve Bank speeches are often a source of comfort. They remind us we’re in the steady hands of deep thinkers who have a database of the latest statistics, access to experts across the country and economic policy tools at their disposal.
That reassurance was evaporated by just five words in RBA assistant governor Brad Jones' address to the Australian Financial Industry Association Conference about the growing challenges we’re facing here and around the world: “there is no historical precedent”.
The word “unprecedented” has been thrown around so much over the past few years it has lost plenty of its intended effect. But it’s concerning when a central bank warns that the risks businesses, investors and entire economies face are either novel or are risks no one in the workforce has personally experienced. That includes our best economic brains in the ivory tower of Martin Place.
Jones identified three risks inside the financial system itself and three outside of it that he thinks are of particular note for the years ahead.
