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Ms Wikramanayake acknowledged Australia was not isolated from the uncertainty that has hindered growth in larger economies such as the US and the European Union.

She said central banks from the US Federal Reserve to the Reserve Bank of Australia needed to respond to heightened inflationary pressures and cool these forces.

[The] pandemic caused the lockdown of economies and that led to enormous fiscal stimulus. Now weve ended up with huge inflation that has been impacted by geopolitical impacts weve seen, Ms Wikramanayake said.

To counter the effects from extreme stimulus, central banks have raised interest rates, which has compounded living costs and corporate borrowing costs.

The Macquarie chief, however, said base rates were not at the highs of the late 1990s, and that Australia was well placed to weather rate increases.

[Interest rates] went down to near zero, and now they have picked up to the threes, but that is still below the highs. Yes, it is impacting households and businesses, but at this level, both the inflation and interest rates, we should be more resilient than other economies, she said.

As borrowing costs have surged, Ms Wikramanayake called out the growing role private capital plays in funding corporate Australia.

She said private capital accounted for 40 per cent of Australian mergers and acquisition activity last year, and singled out the evolution of the superannuation funds, which are participating in more M&A activity.

The super pool is over $3 trillion now. Weve seen the evolution of that pool, a lot of consolidation with fewer, but bigger, funds, Ms Wikramanayake said.

They are also internalising their investing functions, particularly for listed bonds and equities.

Looking ahead, the bank chief said artificial intelligence was here to stay and that corporate Australia needed to leverage these technology developments to drive business.

At Macquarie, for example, AI had proved a pivotal tool when onboarding customers to its digital bank, she said. Hiring, too, was more focused on data analysis, technology and operational risk roles.

Machine learning and AI, especially learning AI like ChatGPT. Sure, you have heard about being wiped out as a human race. Yes there are challenges, but there are huge opportunities, she said.

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Macquarie chief Shemara Wikramanayake believes greater ... - The Australian Financial Review