Public sector should provide liquidity: RBA

The public sector should provide liquidity in times of stress, finds a new paper from the Reserve Bank of Australia.

The authors suggest that given that liquid markets do not exist for all financial assets at all times, central bank should inject funds on occasion. The public sector should also facilitate a change of ownership of assets if conditions demand and buy assets outright in extreme market conditions.

However, the authors also stress that improvements need to be made to the financial

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