Research Discussion Paper – RDP 2022-08 The Consequences of Low Interest Rates for the Australian Banking Sector


This paper is an updated version of a paper that was commissioned for the RBA’s 2022 annual conference on ‘The Causes, Challenges and Consequences of the Low Interest Rate Environment’. Some preliminary work investigating the ‘reversal rate’ in Australia was conducted with Peter Rickards as part of previous research; I am very grateful for the head start this preliminary work gave me when putting this paper together. I am grateful to Luci Ellis, Rachael Fitzpatrick, Jonathan Hambur, Michelle Lewis, Matthew Read, Adam Richardson, Maxwell Sutton, John Simon, Graham White and participants at the RBA’s 2022 annual conference for useful feedback and suggestions. Views expressed in this paper are those of the author and not necessarily those of the Reserve Bank of Australia. The author is responsible for any errors.