There's a lot going on in the latest Reserve Bank Financial Stability Report - from the usual high level concerns that the global economy might yet be stuffed to a stock take of insurance companies now under the Bank's purview (only 108 licensed out of a potential 157) to a reminder of just how miserable the finance company rout was.

"At its height, the non-bank lending sector had total assets of about $25 billion, and accounted for nearly 8 per cent of total lending intermediated by financial institutions," the report says. "Today, the sector is half that size, and accounts for just 3 per cent of total credit outstanding."

The figures would have looked even worse had not the non-bank sector also included building societies and credit unions which have held their market share during the finance company meltdown.

But as well as a reduction in the overall size of the non-bank sector, the Reserve Bank notes an increased concentration of its remnants.


"The building society and deposit-taking finance company segments are both now dominated by a single institution (the Heartland Building Society and UDC Finance respectively)," the report says.

This seems, at least, a stable arrangement.

Elsewhere, the Reserve Bank reports on a new element of the retail payments system that began operating with only a slight wobble.

Since February banks have been making payments between themselves at various times during the day, rather than at a single after-hours moment (the 'interchange') as was previously the style.

Under the so-called Settlement Before Interchange (SBI) system, your transfers between banks should appear at destination on the transaction day as opposed to some time tomorrow. While I haven't noticed any difference, SBI theoretically offers heightened levels of efficiency and convenience not seen before in banking history.

There are, however, a couple of potential downsides to SBI. One is that the more rapid exchange between banks could leave them vulnerable to liquidity shortfalls. Whereas with overnight settlement banks could 'net out' all payments between themselves at their leisure, it's much harder for them to manage liquidity at various points during trading hours.

Another risk is the reliance on the main SBI technology enabler, SWIFT, which the Reserve Bank says has had "some operational issues recently".

Nonetheless, out of 400 SBI transactions recorded since February, there has been only one major hiccup.

"The one significant incident was the result of disruption to the exchange of payments between banks via SWIFT on 24 April," the Reserve Bank report says. "While [back-up systems] continued to operate normally... there were significant delays to the exchange of payment instructions between banks and to the posting of transactions to customer accounts.

"The Reserve Bank considers this to have been a serious incident, which we will be thoroughly reviewing."