Regulation and Australian Financial System
Historical review
The Australian financial system evolved in five stages. The first stage was the introduction of financial institutions during the early colonial period in the 19th Century, where the influence of British institutions was a key driving force. The end of that period was marked by the 1890s depression which saw a major rationalisation of Australia’s financial institutions. The start of the modern era of financial regulation can be traced back to the introduction of banking legislation in 1945 and the establishment of Australia’s first central bank.
In more recent times, Australia has seen two major waves of financial reform. The first wave, in the1970s and 1980s, involved a major deregulation exercise which transformed Australia’s financial system. In keeping with other policy measures aimed at opening Australia to increased trade, investment and international competition. A second wave of reform in the 1990s sought to address new regulatory issues that arose in the post-deregulation period. Financial sector reform did not occur in a vacuum but occurred in the context of a significant era of reform of the Australian economy. Reforms in other areas, and their relationship with the financial sector reforms, are also discussed in this section.
Foundations of the Australian financial sector
Origins of Australia’s banking system
Australia’s monetary and banking system originated in the 19th Century and was modeled on British laws and institutions. Commercial banking began in Australia in 1817 with establishment of the privately-owned Bank of New South Wales, which issued legal tender. This was followed in 1819 by the first savings bank, the New South Wales Savings Bank, which held for safekeeping the moneys of new arrivals to the colonies (Peat Marwick 1985: 1). The number of banks expanded over the course of the 19th Century, including in the new territories of Victoria and South Australia. British banks took the lead in expanding the
The Australian financial system evolved in five stages. The first stage was the introduction of financial institutions during the early colonial period in the 19th Century, where the influence of British institutions was a key driving force. The end of that period was marked by the 1890s depression which saw a major rationalisation of Australia’s financial institutions. The start of the modern era of financial regulation can be traced back to the introduction of banking legislation in 1945 and the establishment of Australia’s first central bank.
In more recent times, Australia has seen two major waves of financial reform. The first wave, in the1970s and 1980s, involved a major deregulation exercise which transformed Australia’s financial system. In keeping with other policy measures aimed at opening Australia to increased trade, investment and international competition. A second wave of reform in the 1990s sought to address new regulatory issues that arose in the post-deregulation period. Financial sector reform did not occur in a vacuum but occurred in the context of a significant era of reform of the Australian economy. Reforms in other areas, and their relationship with the financial sector reforms, are also discussed in this section.
Foundations of the Australian financial sector
Origins of Australia’s banking system
Australia’s monetary and banking system originated in the 19th Century and was modeled on British laws and institutions. Commercial banking began in Australia in 1817 with establishment of the privately-owned Bank of New South Wales, which issued legal tender. This was followed in 1819 by the first savings bank, the New South Wales Savings Bank, which held for safekeeping the moneys of new arrivals to the colonies (Peat Marwick 1985: 1). The number of banks expanded over the course of the 19th Century, including in the new territories of Victoria and South Australia. British banks took the lead in expanding the