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Stability, price of risk need balance: RBA

AAP logoAAP 7/09/2016

Incoming Reserve Bank governor Philip Lowe says financial system stability needs to be balanced with the ability to affordably take risks.

Dr Lowe says that, since the global financial crisis, the cost of intermediation - matching lenders with borrowers - has become more expensive for banks, making the system more stable.

"But we need to keep an eye on this trade-off, because a well-functioning system needs to be able to take risks at a reasonable price," he told the Institute of Global Finance International Conference in Sydney on Thursday.

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