Edited by Yung Chul Park, Takatoshi Ito and Yunjong Wang
Chapter 15: Australia’s Financial Markets and Institutions
15. Australia’s ﬁnancial markets and institutions Gordon de Brouwer Financial services are an important part of the Australian economy. Finance and insurance is the third largest industry sector in Australia, contributing about 71⁄2 per cent of GDP in the year to June 2002, making it twice as big as agriculture and 40 per cent bigger than mining.1 It is a rapidly growing sector, double what it was 15 years ago and growing at about 51⁄4 per cent a year. The sector employs about 350 000 people, almost 4 per cent of the Australian workforce (see Axiss Australia 2003). The markets that underpin the sector are extensive, sophisticated and liquid. Australia has well-developed money, ﬁxed interest, equity, foreign exchange and derivatives markets. Its institutions are strong, diverse, sophisticated, and active in all ﬁnancial activities. Australia’s banking system and ﬁnancial market regulation are classiﬁed by the World Economic Forum as the second most sound in the world. In this context, it is straightforward to see that Australia is one of the leading ﬁnancial systems and centres in East Asia. Because Australia is part of East Asia, the size, breadth and depth of ﬁnancial activity in Australia make it one of the key ﬁnancial sectors in the East Asian region. Australia is also involved in cross-border ﬁnancial activity in East Asia (as well as beyond), although this activity is incomplete since ﬁnancial development in East Asia is incomplete. As is the case for many countries in the region, Australia’s ﬁnancial...
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