List of tables | Submission to the Financial System Inquiry – 6 September 1996 | Financial Sector | Submissions

Table 1: Types of Financial Institution
Per cent of financial system assets
	June 1980	March 1996
Banks	41	46
Bank-owned merchant banks and finance companies	7	4
Other non-bank credit institutions	25	12
Banking group funds managers and insurers	4	8
Other funds managers and insurers	23	30

Table 4: The Two Basic Types of Products
Deposits Insurance policies Annuities	Investment products
Specified nominal amount must be repaid	Investment managed on a ‘best endeavours’ basis. Value of units depends on market performance
Health of institution vital to value of product	Health of managing institution has little or no effect on value of product
Underlying institution can fail, ie cannot meet commitments	Underlying institution can have disappointing performance and a negative return
Institution bears most of the risk	Investor bears most of the risk
Institution must hold substantial capital to meet commitments	Institution holds little or no capital

Table 5: The Current Regulatory Structure
Type of regulation	Members of Council of Financial Supervisors				Other Commonwealth bodies		Other self regulation
Type of regulation	Reserve Bank of Australia	Insurance and Superannuation Commission (and associated bodies)	Australian Financial Institutions Commission (& State Supervisory Authorities)	Australian Securities Commission (& self-regulatory bodies under Corporations Law)	Other Commonwealth bodies	Other State bodies/legislation (for some States & institutions these could be SSAs)	Other self regulation
Supervision/ oversight	Banks Foreign exchange dealers	Life insurance companies General insurance companies Superannuation funds Insurance agents and brokers	SSAs: building societies, credit unions AFIC: special service providers	ASX: stock brokers SFE: futures brokers Collective investments Securities and futures dealers/advisers	Private Health Insurance Administrative Council: health insurers	Friendly societies Trustee companies/public trustees Miscellaneous State-based institutions
Consumer protection and selected other regulation		Life and general insurance: disclosure Superannuation: disclosure Insurance agents and brokers: conduct Superannuation Complaints Tribunal		Corporations: incorporation aspects Securities and futures: disclosure and market conduct	ACCC: competition general trade practice issues pricing	Consumer Credit Acts	Banking, building society and credit union: disclosure and EFT conduct At least 6 industry-based complaints bodies (eg Bank Ombudsman)

Table 7: Consumer Protection Measures
Requirements	Banks, Building Societies and Credit Unions	General Insurance	Life Insurance	Superannuation	Unit Trusts
Legislation	Credit Code	Insurance Contracts Act	Life Insurance Legislation	Superannuation Industry (Supervision) (SIS) Legislation	Sections of Corporations Law
Codes & Disclosure	Codes of Practice (voluntary, but contractually enforceable)	Code of Practice (voluntary) and by Circular	Code of Practice (compulsory), ISC Disclosure Circulars that provide for a Key Features Statement	SIS legislation, Key Features Statement for retail products	Sections of Corporation Law
Regulator	State Consumer Affairs, APSC (monitors codes of practice)	ISC	ISC	ISC	ASC
Complaints Body	ABIO, separate schemes for building societies and credit unions	Enquiries and Complaints Scheme and Insurance Brokers Dispute Facility	Life Insurance Complaints Services	Superannuation Complaints Tribunal	Financial Planning Association Complaints Resolution Scheme

Table A1: Assets of Credit Institutions
Per cent of total
	1929	1936	1953	1970	1980	1985	1990	1995
Banks	94	95	88	70	58	59	69	77
Building societies	2	2	3	5	12	10	5	2
Credit unions	–	–	–	1	1	2	2	2
Money market corporations	–	–	–	3	6	11	11	9
Pastoral financiers	4	3	4	3	1	2	0	0
Finance companies	–	1	3	15	18	13	9	6
Other	–	–	1	3	4	3	4	3
Source: Martin Committee (1991) and Reserve Bank of Australia Bulletin

Table A2: Balance Sheet of the Banking Sector
$ million, June 1956
Liabilities
	Trading banks	Savings banks	Total	% of total assets
Non-interest bearing deposits	2,336		2,336	43.0
Savings bank deposits	–	2,289	2,289	42.1
Fixed deposits	514		514	9.5
Other (excludes capital)	142		142	2.6
Assets
SRDs	521	na	521	9.6
Government securities	415	1,704	2,119	39.0
Loans	1,945	364	2,309	42.5
Other	366	119	485	8.9
Source: Reserve Bank of Australia, Occasional Paper 8

Table A3: Debt-Equity Ratios of Non-Financial Enterprises
	1981–1985	1986–1990	1991–1993
US	0.5	0.8	1.0
Japan	4.8	4.2	4.0
Germany	3.6	2.7	2.8
France	2.7	2.2	1.4
Italy	3.6	3.0	3.1
UK	1.1	1.1	–
Canada	0.9	0.9	1.0
Australia	0.5	0.6	0.6
Sources: OECD Non-financial Enterprises Financial Statements (for all countries except Germany and Australia); OECD Financial Statistics (for Germany); and Reserve Bank of Australia

Table A4: Assets of Funds Managers^(a)
Control by ultimate manager^(b) (%) As at June
	1990	1991	1992	1993	1994	1995
Life office groups	45	45	44	42	39	39^(c)
Banking groups	21	23	23	25	26	25
Other	34	32	33	33	35	36
(a) Excludes general insurers. (b) Some estimation involved. (c) Includes State Bank of NSW funds management operations. Source: Reserve Bank of Australia

Table A5: Average Daily Turnover in Financial Markets
$ billion
Year ended June	Commonwealth Treasury bonds		State Govt bonds	Bank Bills		Equities		Promissory notes	Foreign exchange
Year ended June	Physical	Futures	State Govt bonds	Physical	Futures	Physical	Futures	Promissory notes	Swap	Spot	Forward
1980	0.1	–	–	–	–	0.03	–	–	–	–	–
1985	0.3	–	–	0.3	0.5	0.07	0.07	–	0.8	2.0	0.3
1990	1.2	1.7	2.0	1.7	11.4	0.23	0.19	0.5	7.5	8.6	1.4
1995	6.0	6.0	2.9	1.0	19.0	0.47	0.44	0.8	14.0	7.2	1.0
Source: Reserve Bank of Australia Bulletin and Occasional Paper No. 8

Table A6: Earnings
Per cent of shareholders' funds
	1980–82	1990–92	1994	1995
Banks and finance	14.6	3.5	14.4	16.0
All companies	10.8	4.9	7.2	8.0
Source: Australian Stock Exchange Financial and Profitability Study

Table A7: Superannuation Fund Earnings Rates
	Average earning rate	Inflation rate
1960s	5.2	2.5
1970s	6.8	9.8
1980s	14.9	8.4
Early 1990s	6.8	3.0
Source: ABS Cat. Nos: 5204.0 and 6401.0. Earnings defined as the difference between change in assets and net contributions

Table A8: Assets of Superannuation Funds
December 1995
	$ billion	%
Cash and short-term bank instruments	40.4	14.5
Loans	20.7	7.4
Fixed interest	53.7	19.2
Equities	99.2	35.6
Property	24.2	8.7
Foreign	37.2	13.3
Other	3.4	1.2
Total	279.0
Source: ABS Cat. No: 5232.0

Table A9: Financial System Assets
Per cent of total
	1980	1996
Banking groups	56	59
Insurance groups	18	23^(a)
Other	29	21
(a) Includes State Bank of NSW and its subsidiaries, which are ultimately owned by Colonial Mutual. Source: Reserve Bank of Australia

Table A10: Range of Supervisory Functions in Countries
with Broadly-based Supervisors
Country	Banks/credit institutions	Insurance companies, pension funds	Securities companies	Other
“Mega-regulator” outside the central bank
Denmark	Credit institutions	Insurance, pensions	Securities companies	Fund management
Japan	Banks	Insurance	Securities companies	Fund management
Norway	Credit institutions	Insurance, pensions	Stockbrokers	Fund management
Sweden	Credit institutions	Insurance	Securities companies	Fund management
“Mega-regulator” within the central bank
Singapore	Banks	Insurance	Securities dealers	Fund management
Other countries with broadly-based supervisors
Canada	Banks	Insurance, pensions
Finland (part of central bank)	Credit institutions		Securities brokers	Fund management
Germany	Credit institutions			Fund management
Malaysia (central bank)	Credit institutions	Insurance
Netherlands (central bank)	Credit institutions			Fund management
Switzerland	Banks		Securities dealers (from 1997)	Fund management