Bank Deregulation

Page 1 of 11

Bank Deregulation

By | Feb. 2009
Page 1 of 11
Table of contents
Executive Summary…………………………………………………………………..i 1. Introduction………………………………………………………………..……..2 2. Forces for deregulation...........................................................................................3 1. Customer Needs and profiles…………...……………………………..……..3 2. Technological development.............................................................................5 3. Changing Regulatory Framework…………………………………….……...6 4. The Changing Financial Landscape…………………………………..…..….6 3. Effects of deregulation………………………………………………………..…...8 3.1 The role of Reserve Bank………………………………………………...……8 3.2 Financial market behaviour……………………………………………………9 4.0 Conclusion…………………………………………………………………..…….11 5.0 Recommendations……………………………………………………….………...12 References…………………………………………………………………..…………xiii

Executive Summary

The stability and efficiency financial system is critical to the entire economy. Over past decade, the Australian financial system has experienced significant changes. Change in the financial system implies the need to adapt regulations imposed on financial institutions and markets. Regulation must adapt both to facilitate greater competition and efficiency in the financial sector.

The purpose of this report is to identify and analyse the impact of financial deregulation on the performance of Australian financial system. The study consists of two major sections. First section will analyse the force driving change in the financial system, which is driven by four forces: changing customer needs and profiles, technologies innovation, changing regulatory framework and changing financial landscape. Section two describes the effects of deregulation changes to the role of Reserve Bank and financial market behaviour. To do this, this section will focus on the Reserve Bank’s role in prudential supervision and will identify the ways in which deregulation of Australian financial system enhanced competitive forces.

To conclude this...