TAILIEUCHUNG - Financial Stability Review SeptembeR 2011

Tax credits, if combined with outreach and education efforts and other complementary incentives (such as net metering), can also help drive the market for renewables. Clearly, states cannot expect any one of these incentives by itself to remove all the barriers to renewable energy technology development. This study provides some potent examples of program design and implementation elements that have enhanced and limited program effectiveness. Although the unique socioeconomic, political, climatic, and infrastructure conditions at play within each state make a simple and uniform approach to incentive programs unworkable, states should consider the guiding principles below as they create. | Financial Stability Review SEPTEMBER 2012 Contents Overview 1 1. The Global Financial Environment 5 2. The Australian Financial System 19 Box A Funding Composition of Banks in Australia 33 3. Household and Business Balance Sheets 37 Box B Households Mortgage Prepayment Buffers 49 4. Developments in the Financial System Architecture 51 Copyright and Disclaimer Notices 63 The material in this Financial Stability Review was finalised on 24 September 2012. The Financial Stability Review is published semi-annually in March and September. It is available on the Reserve Bank s website . Financial Stability Review enquiries Information Department Telephone 612 9551 9830 Facsimile 612 9551 8033 Email rbainfo@ ISSN 1449-3896 Print ISSN 1449-5260 Online Overview The euro area sovereign debt and banking crisis has continued to weigh on global financial conditions in the period since the previous Financial Stability Review. Although fears of a liquidity crisis in the euro area were generally assuaged earlier in the year following the European Central Bank s ECB s large-scale lending to banks concerns about the resilience of sovereign and bank balance sheets in the region have persisted. Developments in Greece and Spain in particular triggered a renewed bout of risk aversion and market volatility between April and July as markets became less confident that these and other euro area countries could return their fiscal positions to more sustainable paths. Sovereign borrowing costs and risk premiums rose to record levels in some euro area countries and global share prices declined. These events added to broader doubts about the viability of the monetary union spurring investors to move capital out of the most troubled countries to avoid redenomination risk should they exit the euro. This put further funding strain on banks in the region many of which have been under pressure for some time given the deteriorating economic conditions in the euro area and .

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