Australia: More questions than answers in the Murray Report
Everyone was a little nervous at the contents of the first inquiry into the nation’s financial services industry in over 25 years. It isn’t as traumatic as most feared, but it leaves some important issues unanswered.
When Australia commits itself to undertaking comprehensive inquiries into its financial services industry, it’s worth keeping an eye on their longer-term impact. The Campbell Report in 1981 led to the floating of the Australian dollar, while a by-product of the Wallis Inquiry of 1997 was the creation of the Australian Prudential Regulation Authority (Apra). Australia’s first financial system inquiry since then was led by David Murray, who between 1992 and 2005 was CEO of Commonwealth Bank of Australia (CBA) before becoming inaugural chairman of the Future Fund. The Murray Report, released in early December by Federal Treasurer Joe Hockey, makes 44 recommendations for strengthening Australia’s financial services sector. The government will be consulting with the industry and regulators until the end of March before introducing any recommendations.
The Murray Report is a 350-page doorstopper that prods its searchlight into a range of topics, divided into five broad chapters. The head of investor relations at one of the big four banks says that although four of these (on superannuation, innovation, consumer outcomes and regulatory systems) each have important implications for the sector, it is the first chapter that is by far the most relevant.