“Now importantly, we have seen some policy responses, both in Europe as well as in the United States, that in my judgment address some of the root causes of some of this recent market volatility.

“Ultimately, policymakers will always remain focused on broad-based financial stability, but we also shouldn’t confuse that with saying that we will not see financial volatility at times in the months ahead.”

Yesterday, the Federal Bank of America raised rates again with the bank’s chair, Jerome Powell, stating it is working with the US Treasury Department and the Federal Deposit Insurance Corporation to protect the US economy and strengthen public confidence in its banking system.

“The Federal Reserve Board created the Bank Term Funding Program to ensure that banks that hold safe and liquid assets can, if needed, borrow reserves against those assets at par,” he said.

“This program, along with our long-standing discount window, is effectively meeting the unusual funding needs that some banks have faced and makes clear that ample liquidity in the system is available.”

Anna Stupnytska, global economist at Fidelity International, said “the key risk for the Fed now is that this hike proves counterproductive, further exacerbating concerns about financial instability and fuelling market turmoil”. 

Meanwhile, the Australian Prudential Regulatory Authority (APRA) this week urged superannuation funds to “revisit the value of their holdings”.

At the Australian Institute of Superannuation Trustees conference on Wednesday, APRA’s general manager of superannuation, Katrina Ellis said “trustees should be much more proactive, given the state of the markets, and really be considering what you should be doing to make sure that your valuations are not stale.”

“If you’re constrained by your policies on-out-of cycle valuations, we think that’s something that you should look at because I think the turbulent markets are going to continue.”

APRA had suggested previously super funds needed to improve the quality and frequency of their valuations of unlisted assets.