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Australia's central bank says risks from non-bank lenders limited

The article from The Business Times discusses the findings of Australia's central bank, the Reserve Bank of Australia (RBA), regarding the risks posed by non-bank lenders. The RBA has concluded that while non-bank lenders, which include entities like investment funds and insurance companies, have grown in significance, the risks they pose to the financial system are currently limited. This assessment is based on the fact that these institutions do not engage in maturity transformation to the same extent as banks, meaning they do not borrow short-term to lend long-term, which reduces systemic risk. However, the RBA notes that there are still potential vulnerabilities, particularly in how these non-banks interact with the broader financial system, especially during times of market stress. The central bank emphasizes the need for continued monitoring and regulatory oversight to manage these risks effectively.

Read the Full Business Times Article at:
[ https://www.businesstimes.com.sg/companies-markets/banking-finance/australias-central-bank-says-risks-non-bank-lenders-limited ]