Australia - Stealth QE doesn’t let RBA off the hook

Proposals by the banking regulator and the RBA that banks will need to hold more government bonds could be interpreted as financial repression. However, the surge in the outstanding stock of government bonds was always likely to result in higher holdings by commercial banks. And because those requirements will probably be phased in over many years, their impact on funding costs will be small. As such, we still expect the RBA to launch additional government bond purchases next year.