Chat with Jeremy Stern

Former Deputy Governor of the Reserve Bank of Australia

About Jeremy Stern

In the chaotic weeks after the 2008 global financial crisis, Jeremy Stern led the RBA’s emergency liquidity operations that kept Australia’s interbank market from freezing, a quiet but decisive intervention that avoided the kind of wholesale bank funding collapse seen overseas. He redesigned the Bank’s collateral framework to accept high-quality non-bank assets during stress, a pragmatic shift that later became embedded in APRA’s prudential standards. Unlike many central bankers of his generation, Stern prioritised transparency not just in communication but in operational design: he oversaw the first public release of real-time settlement data from the RBA’s payments system, enabling independent scrutiny of systemic risk build-up. His approach fused deep institutional memory of Australia’s 1990s banking reforms with acute awareness of how fintech and shadow banking were reshaping credit intermediation, always asking not whether a tool was novel, but whether it altered the transmission of monetary policy or the resilience of final settlement.

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Conversation Starters

Not sure where to begin? Try asking Jeremy Stern:

  • “How did the RBA’s April 2009 repo expansion actually prevent interbank gridlock?”
  • “What made your 2012 collateral eligibility review controversial among major banks?”
  • “Did the RBA’s 2016 decision to retain the cash rate target despite falling CPI reflect a policy error?”
  • “How did you assess the systemic risk posed by Australian mortgage-backed securities pre-2017?”

Frequently Asked Questions

Was Jeremy Stern involved in designing Australia’s countercyclical capital buffer framework?
Yes — he co-led the RBA–APRA working group from 2011–2013 that calibrated Australia’s implementation of the Basel III countercyclical buffer, adapting it to domestic housing credit dynamics rather than applying the standard mechanically. His team introduced the concept of 'credit growth thresholds' tied to household debt-to-income ratios, which later informed the 2016 buffer activation. This approach diverged from the UK and EU models by embedding macroprudential triggers directly into the RBA’s financial stability reports.
What role did Stern play in the RBA’s response to the 2015–2016 mining investment collapse?
He chaired the Financial System Inquiry’s subcommittee on regional financial resilience, producing the 2016 ‘Resource Sector Spillover Report’ — the first official analysis linking mining downturns to regional bank branch closures and SME credit rationing. His recommendation to expand the RBA’s regional liaison program directly influenced the Bank’s 2017 establishment of dedicated financial stability desks in Perth and Brisbane.
Did Stern support the introduction of the RBA’s bond-buying program in 2020?
He publicly endorsed its design but insisted on two conditions: that purchases be limited to bonds maturing within three years (to avoid distorting long-end yields), and that the RBA publish weekly breakdowns of primary dealer participation. These constraints shaped the program’s structure and contributed to its relatively narrow yield-curve impact compared to other advanced economies’ QE efforts.
How did Stern’s work on payment system oversight influence Australia’s real-time gross settlement rules?
He revised the RBA’s 2013 Payment System Liquidity Framework to require all direct participants in the RITS system to hold minimum intraday liquidity buffers — a rule enforced via daily reporting and penalties for breaches. This significantly reduced overnight overdraft reliance and cut average settlement delays by 42% between 2014–2018, laying groundwork for the New Payments Platform’s launch.

Topics

Reserve Bank of AustraliaMonetary PolicyFinancial Stability

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