The financial system is essential to the well-being of all Australians.
The system is undergoing change under the pressure of new market and
customer needs, new technologies and global competitive forces. The last
comprehensive review of the system was undertaken by the Australian
Financial System Inquiry (the Campbell Committee), which presented its
report in 1981. Decisions taken in the following years set in train substantial
reforms of the regulatory framework generally described as â€˜financial
The Treasurer, the Hon. Peter Costello MP, established the present Financial
System Inquiry in June 1996 with the following mission:
The Inquiry is charged with providing a stocktake of the results arising
from the financial deregulation of the Australian financial system since the
early 1980s. The forces driving further change will be analysed, in
particular, technological development. Recommendations will be made on
the nature of the regulatory arrangements that will best ensure an efficient,
responsive, competitive and flexible financial system to underpin stronger
economic performance, consistent with financial stability, prudence,
The full Terms of Reference are reproduced in Appendix A.
The Inquiry is required to provide a final report to the Treasurer by the end
The Committee has adopted several lines of inquiry in its approach to the
Terms of Reference. Shortly after its establishment, the Inquiry invited
submissions from the public. A total of 268 submissions were received.
Analysis of these submissions by the Inquiry is continuing and they have
provided valuable input for this paper.