The Committee led by David Murray which is undertaking the Financial System Inquiry has today released its Interim Report.
Overall the Interim Report has concluded that the Australian financial system has performed reasonably well, which is reflected in the policy option of ‘no change’ as being part of the spectrum of options considered for the majority of the priority issues and observations identified.
However the Committee also acknowledged that there are areas for improvement and the Interim Report has made a number of observations and includes a range of policy options for each priority issue. The table set out in this publication provides a summary of the observations and the key policy options being canvassed by the Committee.
The Committee has stressed that the policy options are not draft recommendations, and seeks stakeholder input on the observations and policy options in the Interim Report.
There are no real surprises in the Interim Report and many of the areas flagged as needing to be changed have been debated before. For example, better disclosure in financial services, enhanced powers for regulators, encouraging the use of income streams in retirement, and the power of technology in financial services.
In his speech to the National Press Club, David Murray specifically referred to the challenges associated with the disclosure rules in the financial system and argued it may be appropriate “to develop a viable alternative approach that is not simply more detailed rules.” The Interim Report acknowledges that this problem remains despite several efforts to improve the disclosure regime.
In future publications, we will be analysing in more detail some of the challenging policy options canvassed in the Interim Report.
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