Transcript of Question & Answer Session Panel Participation

Welcome, everyone. I’d like to start by introducing our panel. Firstly, we have Jo Dawson, Group Treasurer for Westpac. She’s responsible for treasury operations, including balance-sheet management, group liquidity, global wholesale funding, capital management and execution on balance-sheet management. Chris Kent is the Assistant Governor Financial Markets at the RBA, a role that he’s held since 2016. He’s responsible for the oversight of the bank’s operations in both domestic and global financial markets, including management of Australia’s foreign reserves. He’s also a representative on the BIS Markets Committee and BIS Committee on the Global Financial System. Finally, we have Stuart Simmons, Head of Multi-Asset Solutions at QIC, where his focus is on design and implementation of derivative-based investment solutions for asset owners. He’s a member of the Australian FX committee and also Australia’s private sector representative to the Global Foreign Exchange Committee from 2019 to this year, 2023.

To set the scene, we know that in recent years global markets have experienced a series of pretty significant shocks, which have resulted in significant asset-price volatility and subsequent stress in global liquidity. We’re now in a situation of high, sticky inflation, slowing global growth and heightened geopolitical risk. So the outlook on how you manage risk in such a situation is highly uncertain for financial institutions, asset owners and managers as well as policymakers. Luckily today, we have three of those people to represent us and talk us through how we navigate those periods. I’ll start with you Jo, if I can. Given the multiple roles that you perform at Westpac, what’s your thought process on how you manage that fine balance between the investment of the liquidity of the balance sheet and maintaining adequate liquidity on how you support your clients and their growth ambitions but against a backdrop of also protecting against potential market shocks?

Yes. It’s a really interesting one; thanks, Nick, for the question. I think, for us, it’s always about: how do we maintain a really strong and robust balance sheet? And that’s always our starting point for anything we consider, in terms of how we think about the broader balance sheet itself. From my perspective, we sort of think about what is the market environment that we’re in and what are the things that we could be facing and we think about setting our liquidity, whether that be from a liquid asset perspective or where we’re running our liquidity from a regulatory ratio or, say, our internal stress test and an appropriate level for the market conditions that we are in. So we always consider that. As part of that, we think about forecasting our balance sheet, and we think about our customers and our customers’ needs and what they might look like over the period ahead. Obviously, that’s an important input, in terms of how we think through the liquidity needs of the organisation. But, obviously, in more volatile markets, we’ll think about how to ensure that we’ve got that strength, and maintain that strength, of the balance sheet.

Perfect. Stuart, I might jump over to you. You are going to have a slightly different lens on your investment philosophy, and QIC’s stated purpose is ‘to deliver an optimum investment outcome with and for our clients’. So, as we’ve seen over the last couple of years, there’s been a pretty significant change in the way that people are looking at asset classes, whether that’s investment into private markets to try and take out some of that volatility; but you then also have to weigh that against potentially staying in public markets and staying in more liquid markets, where you have access to that liquidity. Can you talk us through how your lens and your approach works on that investment philosophy?

Yes. Thanks, Nick. It’s pretty well known now that investors, particularly super funds, are going more into those private markets, which helps to smooth out the market risk. But you do take on some other risks when you do that and, in particular, you’ve got to consider liquidity risk. Australian investors have had a pretty good track record there of managing liquidity risk. If you look back to the COVID shock, that was a pretty extreme stress test for super funds, and there were stresses there that they ended up coming through. If you consider the triple whammy, firstly, you had the FX hedging losses; secondly, you had really heightened member-switching out of diversified and growth assets into cash; and, thirdly, you had the government’s early release scheme, which was unforeseen. Super funds managed to navigate through that. But, really, recent events – you think about Silicon Valley Bank or you think about the UK pension crisis in September last year – really go to show how quickly things change and how these events seem to have accelerated. And it’s probably a good time for super funds to – I mean, they can’t rest easy; they’ve got to reflect on that and really look at how they’re going to adapt to this environment where you do have these changes occurring so much faster than they have in the past.

Yes, absolutely. Chris, we might sort of jump to you because, I guess, now you’re looking holistically across the market and some of the risks and how, I guess, everyone manages their risk. The RBA stepped in extremely quickly during COVID and provided not only lower rates but also significant liquidity facilities to manage that stress that may occur, as Stuart mentioned. How is the RBA thinking about this going forward to deal with potential future financial market shocks? With the advent of COVID coming out of nowhere, you really have to sort of protect against the unforeseen.

Yes. I think we’re pretty well placed to deal with financial shocks that might come along to the system. The Australian financial system is in very good shape. We, as a Central Bank, have all the tools that we need, and we can use them flexibly. I think the other thing that we saw during COVID and in other episodes is that we cooperate very closely with the key agencies, particularly APRA, ASIC and Treasury. As Jo suggested, the banks are in a very strong position in terms of their capital and liquidity, thanks to their efforts but also overseen by APRA. And the recent turmoil in the US and European banks sort of showed that they are a world-leading regulator. There’s a lot of liquidity in the system still, as a consequence of our balance-sheet policies, and that’s going to be there for some time. And we can provide liquidity, as needed, through our open-market operations; they’re at full allotment at the moment, so banks can get, within reason, what they need. They can pledge a wide range of collateral, and we can reach out, if needed, to about 150 counterparties. So money can go where it’s needed, if it’s needed. So I think, for all those reasons, we’re pretty well placed: a strong financial market to deal with a shock, if and when that occurs.

Yes, absolutely. I think we know that the Australian banks are actually perhaps the best capitalised in the world at this point in time, so we are in a very, very strong position compared to perhaps some of our global peers. Jo, jumping back to you and talking about that capitalisation of the banks, going forward, we’re probably going to see continued reduction in global liquidity, even though, as Chris said, there is surplus and the market is very flush with liquidity, but that liquidity will be withdrawn slowly but surely. Can you talk us through your thought process, when we look at global markets and the funding opportunities? In terms of moving away from some of those liquidity facilities into global capital markets against a backdrop where the Australian yield curve is relatively flat and the global yield curve is quite heavily inverted, again you have to also weigh up against sort of duration risks and how you’re looking at that from a funding perspective.

Yes, sure. I think you’re absolutely right in terms of how the Australian banks are regarded relative to peers in global markets, and that certainly sets us on a good first foot when we go into markets more broadly. I think, just speaking about liquidity and, obviously, the run-off of the CLF over the course of 2022 and now with the maturity of the term funding facility, for us, it’s much more about getting back to normal: getting back to our normal activities of going back to wholesale funding markets. And we’ve been doing that for a little while now, over the course of the last sort of year or so: getting back to what we would ordinarily do in accessing various markets, whether they be onshore or offshore markets, for the range of securities that we issue, whether that be senior covered bonds in the Tier-2 space or AT1. So, for us, it’s very much about getting back to that normal level of activity. We certainly consider the rundown of liquidity, in terms of those forecasts that I talked about before, and how we might need to fund ourselves over time. But from our perspective, issuing in the term space has been much more back to what we would ordinarily have done pre-COVID.

In terms of how we look at the markets, for us, we don’t take duration through our term funding; what we look at is very much a relativity of all funding sources available to us back to a floating rate, a three-month quarterly swap in the Aussie market. For us, very much about how we think about all our assets and liabilities across our sheet is back to that sort of neutral rate of quarterly BBSW. So that’s much more about how we think about funding more from a liquidity overall perspective than actually from a duration perspective for the balance sheet.

Perfect. Actually, Chris, we might follow on from there. Jo mentioned the demise of the CLF and the roll-off of the TFF coming this year. If we look back at September 2019 in the US, as liquidity was starting to be withdrawn from the system, there was a pretty significant spike in the overnight SOFR rate. We went from 2.43 per cent to 5.25 per cent in 24 hours; in fact, actually, in the (inaudible), it got up to as high as 10 per cent, which sort of prompted people to think about the withdrawal of liquidity and what that might mean for the system and some potential risks that could occur as we withdraw liquidity. Are you concerned, or perhaps can you talk us through your thought process on the roll-off of the TFF and whether that might potentially lead to some market dysfunction?

I’m not concerned. I am alert, but I expect the process to run pretty smoothly. Remember, of course, we’ve already started this, so that $10 billion has already run off in recent times. There’s another not quite $70 billion to run off between now and 30 September and then, next year, the rest of it: $110 billion by June 30 next year. Of course, that has implications, as Jo suggested, for banks’ funding costs, bond markets and money markets, so we’ll watch this carefully. But banks have been planning pretty well in advance; again, APRA has been ensuring that they have. They’ve been issuing bonds in advance to repay the TFF. I think it’s helpful though to recognise that there are two types of needs. There are some banks that need money in their ES accounts to pay us back. There are other banks that have a lot of money already their ES accounts and they don’t need that to pay us back. But, remember, they got that money from the TFF by pledging collateral, and a lot of the time that was securitised mortgages, so that gave them a lot of extra liquidity. So, as that process unwinds, they may need to go get that liquidity because they’ll be losing the ES balances and they need to replace that with other HQLA, government bonds, semis. So that process has started; in fact, it started prior to the TFF, with the CLF running down. Banks are issuing bonds. They can issue more term deposits; that helps the adjustment as well, and there has been some of that happening. But those balance sheet adjustments are already in train and they’re running smoothly and, as best we can tell, that’s likely to remain the case.

So, as long as global capital markets continue to fill the void, there should be no disruption to them.

Right. And the March episode was sort of something that we were all watching very carefully, and banks pulled back, as you would think. But it was for a short, brief period of time and then Australian banks were out there, issuing again in good quantity at good prices.

Yes, absolutely, very quickly, which shows, obviously, a high global demand for our Bank’s paper, which is a strong sign and feeds through to the stability of the local financial system. Stuart, we might jump across now to what’s being asked of you from your clients, if we can. In particular, we talked about in the introduction your focus on derivatives. What’s being asked of you? Is it a tactical use of derivatives across your investment portfolio, or is it more-structural applications to synthetically create that exposure, and then that allows you to create more cash in reserves?

I think Australian investors are getting a lot more sophisticated in their use of derivatives. If you take a look again at the super fund industry, there’s really only one essential use for derivatives, and that’s currency edging. So every institutional super fund would have offshore assets and they’d need a hedging program to be able to manage their foreign exchange risks. Every other use of derivatives is really optional. But we’re finding that there’s this increasing recognition of how they can be utilised for both defensive and offensive reasons, if you like: one is to protect returns, and the other is to generate returns. I guess a defensive use of derivatives is using options for TAL protection; an offensive way might be using futures for a tactical asset allocation program to tilt away from their strategic asset allocation. With the increasing sensitivity of the Your Future, Your Super benchmarks, we’re seeing super funds using derivatives to just narrow that tracking error to the benchmarks from their underlying asset mix. And, as you’ve mentioned, there’s that substitution effect as well, where a super fund might want to replace physical investments synthetically with derivatives either for increasing flexibility or to generate an additional return.

Yes. Then, actually, if we talk about the advent and the growing nature of derivative usage, particularly in the super fund sector, it would be topical to then talk about the UK pension crisis from September 2022; that, once again, put derivatives firmly in the spotlight. I think also, through COVID, we saw the main eight Canadian pension funds as well who have run into probably almost a positive case on how they manage their liquidity risk, given the size of the derivative hedging portfolios they had, particularly using foreign exchange. What lessons could Australian investors learn through that; and what are you taking away from those crises on how you build your portfolio?

I think probably the first thing to highlight is the main difference with the UK pension crisis and the liability-driven investment funds, which is where the epicentre of that event was. They often use leverage, so there’s leverage embedded into their investment programs, which is something that super funds can’t do; so that’s the main key difference. And we know that the UK government budget triggered a sell-off for the gilt market, but it was really the behaviour of the funds. The initial sell-off on gilts weakened their stance and they had to put up margin calls, which further exacerbated the sell-off in gilts, and you had this vicious circle, where the Bank of England ended up having to come in and really intervene in the market to put a stop to it. So, if I were to put the three main causes down of that mini crisis, No. 1 would be the leverage that’s embedded in that system. No. 2 would be really poor collateral management; they had to raise cash all the time rather than being able to put the gilts up as collateral themselves. No. 3 would be just a failure of the imagination, when it comes to your stress testing: the fact that that event was unforeseen and that there would be that much of a sharp sell-off in the gilt market. I think, if there are key learnings domestically, one would be, in terms of stress testing, to use that imagination and particularly, given the speed of events, to have a look at how you’re defining what’s liquid and what’s not liquid. So, in a funds liquidity management plan, they may consider that anything that could be sold up to 30 days without adversely impacting the market is liquid. You see, with the speed of these events, that 30 days is way too long. Even five days is too long. You need cash instantly. If you’ve got member-switching or you’ve got margin calls to make, you really need access to cash in a hurry. I think they’re the key learnings there for the domestic industry.

It’s a great point on the speed. We all talk about the advent of apps and real-time payments, but that has increased an additional risk, which needs to be managed on the speed at which these things can occur. So perhaps, Jo, it’s an opportune time to come back and ask you a question. Earlier this year, we had the failure of both Silicon Valley Bank and, obviously, then the follow-up of First Republic, which does highlight those liquidity risks and how you would manage those risks within the balance sheet and also how quickly a run can occur with real-time transfers and perhaps the advent of social media as well. How have those events this year and then also some discussions around IRRBB locally and APS 117 coming in change the way that you look at the liquidity and market risk for the bank?

So I think a couple of things come out of Silicon Valley bank in particular. I think what it has done is really reiterated the fact that strong balance-sheet management is critical for any organisation. And I think, when you look at some of the activities that were undertaken with the Silicon Valley Bank, it wasn’t just one thing; it was a multiple range of things where the practices were probably not those that you’d associated with strong balance-sheet management. So I think that’s a really important thing, and I’ll come back to it. The other thing that I think was really clear coming out of Silicon Valley Bank and the First Republic Bank – Chris touched on this a bit earlier – is just that, when regulation is done well, it can really strengthen an overall system. And I think, from an institution perspective, that is really clear, and I think that has been one of the sort of outcomes that has been observed through what we saw back in March.

I guess, from my perspective, looking at some of these things, the fact that we’ve got strong liquidity in the Australian banks and having the appropriate way of managing our liquid assets through, as I said before, thinking about these from an HQLA perspective – what is the strongest form of liquidity that we can be holding here on our balance sheet and how do we account for those, so what’s our hold to maturity versus we have no holds on maturity and we have everything through fair value and through OCI – things like that make a real difference at those times when you’ve got volatility in markets. And I think one of the things that I observed through the SVB was, while we did have a number of our offshore investors, particularly, come and ask questions, as I’m sure they asked many of the issuers across their portfolios, the thing for us was that it just wasn’t a big deal; it didn’t become a big issue for the Australian banks. And I think it really does go back to the fact that practices that we deploy across our sheet, the way we manage our interest rate risk and the fact that Australia is the only jurisdiction that has IRRBB in pillar 1 – many things that – you know, when you were actually talking to investors over that time and responding to their questions, they really got a sense of the strength of not just the bank but also the broader system, and I think that was a key learning for us. I think, from a deposit side, obviously concentration deposits are pretty critical and I think, when you look at where there were concentrations, particularly with SVB, that was a real weakness. So, again, it’s thinking about those concentrations on an ongoing basis.

So, Chris, getting back to those challenges, I guess, the real-time payments within the banking system being created, what challenges does this pose for financial markets, and how is the RBA looking at this?

I guess I’d come back to the fact that right now there’s actually a lot of liquidity in the system. Many banks are sitting on very large ES balances, and that’s the highest, most-liquid asset you can have. Even so, we’re still monitoring things very consistently. On a regular basis, we look at financial market prices, bid office spreads, market debt and those sorts of things. We’re talking all the time to our counterparties and market contacts, and they know our number, if they’re feeling stressed, and can tell us. We look at demand coming through our weekly auctions and these sorts of things. So, if we needed to, in quick time, we could provide extra liquidity. There’s so much liquidity in the system at the moment though that we’ve been able to pull back our open-market operations and do a weekly auction, which is fine. But we’ve got flexibility; if we needed to, we could change that schedule and introduce more frequent open-market operations. We saw demand at those auctions pick up a bit during these banking stresses in March. Even though Australian banks were far from the centre of any of that, there was still some effect, but it was pretty modest and it was pretty short-lived. We’ve got other facilities as well to provide liquidity: overnight repos are just one example. Anyway, liquidity is more than adequate for the system as a whole, but that doesn’t mean that there can’t be some demand pressures from time to time, and we’ll be alert to that. And I think the other thing is, look, through all of that, monetary policy transmission is working as it should. So, again: alert, but not concerned.

And I think it goes back to, I guess, as you’ve said a couple of times over this panel session, that the RBA, if required, has multiple levers that it can pull in a very quick manner; it has a very efficient transmission mechanism to the economy; and then, coupled with the extremely well-capitalised banking system, we’re in a very strong position locally, which is great to see. Stuart, given the growth of the superannuation sector, I actually have two questions, if I can, for you. One is that we’re seeing huge amounts of inflows of money moving into the superannuation sector, and I know that there’s been some discussion about concentration risk potentially moving into the ASX, where superannuation funds are only sort of circa 32 per cent of the market and growing quickly. So does that sort of potentially create any risk down the track? Then, secondly, how are you looking at the assets that you have within your portfolio that could be unlocked and the liquidity that they may provide through repo-facility collateral switches which are becoming more prevalent in the market?

I think super funds naturally, for a while, were aware of the size of their investment pool versus the size of Australia’s capital market. So there’s been this tendency to allocate more money offshore for quite a long time now, and that trend is going to keep on going. One is for concentration risk, but the other one is for diversification, of course. In terms of unlocking the value of their portfolios, I’d say there are two things to talk about there. One is that’s there’s this increasing appreciation for the value of the assets that funds have on their balance sheet, whether it’s the cash that they’ve got or whether it’s the security: fixed income or on equities’ securities. So I think there’s going to be an increasing use of repo and securities’ lending because, given the heightened regulatory environment in banks, there’s often a need for banks to have cash – we’re talking about it now, but that’s not so much at the moment – but there’s also often a need for banks to have certain securities. So there’s a premium to be offered to be involved in the repo and securities’ lending markets.

Another sophisticated, I guess, use of derivatives in this sense is what I’d call exposure management, which is where a fund which would traditionally allocate – let’s say that they want to top up their international equities exposure and allocate three per cent to global equities. Instead of just allocating that to a manager or investing themselves into physical equities, they might consider which expression is best and look at whether it’s a physical expression, whether they can synthetically use derivatives through total returns swaps or futures, because sometimes there’s a funding advantage to be done through derivatives. Particularly in some markets, that’s structural, and you can earn perhaps up to five per cent additional return just through structuring it through the derivatives markets.

Yes, that’s a great point, and I think it’s where the power is, I guess, of Australia’s superannuation sector: the huge, deep liquidity value that we have, whether it’s through our performance notes, leveraging – I shouldn’t use the word ‘leverage’, but our utilising the liquidity value that sits within those assets provides value to others, whether through repo lending facilities or our performance notes and things like that, which ultimately will benefit superannuation holders in the country. Finally, Chris, I’ll ask you a question. Given your lens – along with the Governor, you’re the representative on the BIS Committee on the Global Financial System for the Markets Committee – what global perspectives can you bring from that forum to this group here today, and how does it help you with your stewardship of Australian monetary policy?

The value of those committees is great because you can get a timely exchange of information, and ideas, and gain a better understanding also of our own systems by sort of doing a compare-and-contrast with others. The one thing that’s really struck me in the past year or so is just how strikingly familiar many of the circumstances are. If you focus on, say, the Australian press, you’d think we were unique; and the high inflation that central banks are trying to fight and the very rapid tightening of monetary policy: that’s a global phenomenon, at least across advanced economies; not absolutely everyone: the BOJ is an exception. So there’s a lot of helpful exchange of information and lessons to be learned. And sometimes you can learn about the very different experiences, though, like the banking problems in the US and Switzerland and what the authorities were doing. So that’s very useful to get a timely read on how their markets are responding and what they’re doing to help calm things down.

Another issue that we’ve been discussing is that we all face this sort of less pressing but still important challenge of thinking about – as our balance sheets gradually decline over the coming years – what does that mean for our market operations? And, again, it’s helpful to get their perspective and see what they’re thinking about where they are heading. So that can inform our own planning. We’re still a long way away from that and needing to change our operations, but it’s helpful to be in that forum and get these insights from others.

Thanks very much for your comments, guys. I just want to dovetail off the commentary that you made about the capital markets, particularly yourselves, Jo and Nick, given that you have the TFF funding to repay, and forgive me if I’m using the incorrect wording here. But I just would like to get a sense of where you might look for that capital. There have been reports about USD covered bonds, overseas markets and local currencies. Can you talk a bit about where banks, like Westpac and your peers, can find this capital, given the current market conditions?

So, if you think about our term funding facility, we’ve got $30 billion of term funding which is due for maturity over the next year and a half, I guess, out to June next year. From our perspective, we’ve thought about that and, when we drew it down, we actually thought about how we would need to repay that when it came due. So we thought about it and we drew it down in sort of smaller instalments over time, as opposed to in big lumps. So, for us, the way that we think about that is in much the same way as we would any other wholesale funding maturity. So, as we’re sort of planning and thinking about our funding, we’re looking at the various markets which are available to us. They’re the same markets we’ve been going to now for the last decade or longer, in terms of accessing those. So you’ve seen, over the course of the last couple of months, that we’ve been active in covered markets, we’ve been active in senior markets and we did a Tier-2 transaction yesterday. For us, it’s about the range of issuance opportunities that we have across the globe. We have seen a very supportive domestic market but also, importantly, we’ve seen supportive offshore markets. So they’re the same sorts of investor markets that we would have gone to pre-COVID where we’re also looking to go back to, and what I’d say is that we’re receiving a very positive response when we go back to those markets.

Maybe I can add to that from an HSBC perspective. I think, domestically, it’s the same thing. Certainly, we haven’t been as frequent an issuer as Westpac. But I think, coming out of COVID and the withdrawal and reduction of those liquidity facilities in the past, we now need to think about: how do we manage our capital in the right way? And, as Jo said, it’s having as many options as possible, it’s becoming a frequent issuer to make sure that investors are very comfortable with you as an issuer going forward and then it’s becoming a frequent issuer as well so that you can have that developed curve that people can access and they know where your paper is trading and it creates a pretty deep and active secondary market liquidity. So, actually, I might follow up that answer with a question for you, Stuart. That is: do you see, actually, from an investment perspective, that you’d probably like to see more issuance in Aussie-dollar paper for the superannuation funds and for the domestic investors, given, I guess, that local capital markets are still relatively certainly smaller in size, but we’re going to have a very deep, broad liquidity pool coming through from the superannuation sector?

I’d probably have a different answer. On behalf of the team that I work with, who are the physical fixed-income investors, they probably want to see more domestic paper. I want to see more offshore because it creates that cross-currency basis to generate additional return in currency hedging, so we’d probably have two different opposing views on that. For me, really, I’m ambivalent.

Spoken like a true derivative specialist; yes, fantastic.

With all the trauma that was going on with the Silicon Valley Bank, the US Treasury has moved through an 80-point range in two days and, obviously, the associated markets were very volatile. I’m just interested in what happened in your war rooms during that time and what was going on in your organisations in those two days.

I can talk about Westpac. So, in terms of what we were looking at, it was pretty much the same stuff that we look at all the time. So we are looking at our liquidity, we are looking at our funding, we are looking at all of our risk positions daily and we’re looking at how those risk positions are moving and what the impact of various market shifts would be. Obviously, there was probably a bit more interest in terms of that from senior management and the like, so there was a bit more communication up, over the course of that period of time, and understanding whether there were any other knock-on consequences of that to other things that we might not have considered. So, from our perspective, it was very much about using the tools that we had, using the information that we had that we look at very regularly but also thinking about, ‘What is the new information that we have from various markets, and is there anything that we need to be thinking about differently to what we had been before, given the circumstances out there in the market?’ There was a lot of that. The good thing was that, when we looked at the Silicon Valley Bank and we looked at some of the practices, as I mentioned before, we were very pleased, and it probably reiterated to us that, with the way that we were performing some of our processes, the way that we were thinking about our risk management, the way that we were managing our liquidity and the way that we were dealing with the regulator and the like, there wasn’t a lot that we had to change because of that. So, from our perspective, it reinforced a lot of things that we knew, but it probably gave us some greater, I guess, comfort in terms of some of the practices that we undertake regularly anyway.

I’d reiterate the same thing. I think the knee-jerk reaction was obviously a huge amount of questions being asked at a board level. But I think, as Jo said, actually, we got through it really quickly and it reiterated that Australia’s banking system was really sound. I think, as Chris has mentioned many times, there is a deep pool of liquidity locally and, from the way that we manage our risk through an LCR and NSF basis, there were no real concerns, I think, that we held locally. So we were able to move on pretty quickly from that. And, again, that just highlighted the strength of the system, and how we’ve managed the risks as a banking sector domestically is probably why Australia is sort of best-in-class as well. I think that’s probably it.

The regulator did, obviously, ask for more frequent reporting, and I think all of the banks provided that. So there were the normal responses that you’d expect to see from the regulatory fraternity and the interaction and communication that you’d expect to see. It kind of happened as you would expect. But you’ve got to remember that we do a lot of our own fire drills, stress testing and planning for these types of events; and the good thing is that, when an event occurred, we were able to go through the steps that we have in place and it played out in a positive way.