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(Bloomberg) -- Australia’s central bank is honing its focus on potential financial shocks linked to the nation’s fast-growing A$4.1 trillion ($2.6 trillion) pensions industry, and working through multiple scenarios with regulators.

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Speaking at a conference run by Conexus Financial on Thursday, Reserve Bank Assistant Governor Brad Jones said it would be a “dereliction of our duty not to be engaging with the industry” on liquidity risks. He reminded the audience that the sector was now worth 150% of the economy’s gross domestic product.

The RBA is working with regulators to “think through different scenarios where you could potentially have a multitude of shocks” come together, said Jones, who oversees the financial system at the central bank. The “interconnectedness in the system is much higher than it was 15 years ago during the global financial crisis.”

The central bank has previously warned the surging growth of the nation’s pensions industry has created new risks to the stability of the country’s financial system. Potential scenarios could include a large market shock that undermines confidence, an unexpected change in policy settings or a cyber attack, Jones said Thursday.

Those risks were amplified by pension funds — known as superannuation — holding far more short-term bank debt than during the global financial crisis, Jones said. Then, they “collectively owned about 5% of short term bank debt” whereas it now stands at somewhere between 35%-45%, he added.

Jones didn’t address the outlook for Australia’s economy or monetary policy during his session.

Jones said that the central bank is also looking at the foreign exchange exposures of Australian pension funds, given their growing investment in offshore assets.

“One is the potential for very large moves in foreign exchange markets to accompany these other market stress events and accelerate or perpetuate the call on liquidity in a stress event,” Jones said.

“There’s also the other element of just outside of stress events, the fact that this community here will become almost certainly a larger and larger player in the FX swap market.”

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