RBA governor Glenn Stevens surveyed rates markets in a cogent manner for the House of Representatives Standing Committee on Economics in Brisbane yesterday."Perhaps the most remarkable feature of the international scene at present is the exceptionally low volatility of financial prices," he said.Stevens said they were "the lowest observed over the past 25 years for sovereign bonds, equities and foreign exchange. "Yields on sovereign debt of the major countries are also very low, the lowest on record in some cases. "Spreads on investment grade and financial corporate bonds have reached multi-year lows and in Europe yields on so-called 'peripheral' sovereign bonds have in some cases fallen below previous historic lows," he said."It is not as though there has been a dearth of geo-political or financial events which might ordinarily trigger more caution among investors. But compensation for risk on financial instruments remains scant."The reasons for these remarkable trends, including the extent to which they reflect the effects of the exceptional monetary policies being conducted by the major jurisdictions, or other things, could be debated at length. "What is clear though is that a combination of forces has resulted in financial conditions remaining remarkably accommodative.Stevens said this had been reflected in a decline, at the margin, in interest rates in Australia, even though the Reserve Bank had not changed the cash rate for a year. "Australian governments have continued to borrow at or around the lowest rates since Federation. Similarly, funding costs for financial institutions have been declining," he said. "This, and an increase in competition to lend in an environment of still fairly moderate credit growth, has contributed to a reduction in the rates on housing and business loans."