The Political Economy of Prudential Regulation in Australia

Caner Bakir
Additional contact information
Caner Bakir: Koc University

Chapter 4 in Bank Behaviour and Resilience, 2013, pp 116-134 from Palgrave Macmillan

Abstract: Abstract On 2 March 1996, the Liberal Party won its first federal election after 13 years of ALP rule in Australia. On 30 May 1996, one of the first acts of Peter Costello, Treasurer of the Howard Coalition government, was to establish the third major financial system inquiry (FSI) to review the Australian financial system (later known as the Wallis Inquiry).1 The Wallis Inquiry was important in the new era of financial regulatory change in Australia because it aimed to address the issues of whether, and if so how, the supervisory and regulatory arrangements at the time should be reorganised to address future challenges. One year later, on 18 March 1997, the Wallis Committee submitted its 700-page final report containing 115 recommendations to the government. Two of the more controversial recommendations of the Committee concerning prudential regulation were numbers 31 and 32. The former recommended the creation of a single prudential regulator to replace the RBA, the Insurance and Superannuation Commission (ISC) and the Australian Financial Institutions Commission (AFIC) while the latter said that this agency should not be the RBA. Following the government’s adoption of these recommendations, Australia became the first country in the world to adopt a functionally-based financial supervisory/regulatory framework, the so-called ‘twin peaks’ model.

Keywords: Institutional Change; State Capacity; Regulatory Arrangement; Financial Service Industry; Financial Supervisor (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-1-137-30816-0_4

Ordering information: This item can be ordered from
http://www.palgrave.com/9781137308160

DOI: 10.1057/9781137308160_4

Access Statistics for this chapter

More chapters in Palgrave Macmillan Studies in Banking and Financial Institutions from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().