“As emphasised in the Bank’s initial submission, the general absence of leverage in superannuation was a key source of resilience in the Australian financial system during the financial crisis,” the submission stated.

“Furthermore, the compulsory and essential character of retirement savings implies that it should remain largely unlevered.”

The RBA also noted that the use of leverage by superannuation funds to enhance returns has been mainly taken up by SMSFs.

“The Bank has previously commented on the risks that may arise from geared property investment through SMSFs, which may act as an additional source of demand that exacerbates property price cycles,” the RBA stated.

“Nonetheless, some limited leverage for liquidity management purposes may be appropriate.”