An Unexpected Sea Change
Australia — Financial System Regulatory Update
Over the past two decades, Australia has become one of the world’s wealthiest nations and developed a surprisingly large financial services sector. A once-in-a-generation review of this small but impactful nation’s financial system will likely alter financial life for all Australians while creating challenges and opportunities for all operators in the market.
The Murray Inquiry
The sheer size of the Australian financial services segment is difficult to overstate, which is why this week’s Interim Report from the Financial System Inquiry has generated so much interest from all sides of the market. Chaired by former Commonwealth Bank chief executive David Murray, the inquiry was tasked with “examining how the financial system could be positioned to best meet Australia's evolving needs and support Australia's economic growth”. After reviewing thousands of pages from over 280 submissions representing the whole of the nation’s financial market participants from banks to brokers and regulators to industry associations, the Panel released its much anticipated interim report this week.
The report makes no firm recommendations and is non-binding, but its pithy “observations” carry substantial weight and have captured the attention of the nation’s financial professionals who see clear change on the horizon.
The 460 page report leaves few corners of the Australian financial system unturned, broadly finding the system to be “competitive, albeit concentrated”, and well suited to the needs of the country and the population. At the same time, the report bravely challenges some of the most fundamental aspects of the financial system and assesses the risks they carry for the country.