Speech Summary Remarks to the Melbourne Economic Forum
Glenn Stevens
Governor
Melbourne Economic Forum
Melbourne –
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- Audio 15.49MB
- Q&A Transcript
The speech offers observations on some of the issues raised in the Financial System Inquiry and provides context about conditions in which the Inquiry is working. Specific consideration is given to the impact of the global financial crisis in Australia compared to overseas.
Australia's implementation of international regulatory standards is then discussed. The speech suggests that such standards should be considered as ‘minima’ rather than ‘maxima’, and that Australia's higher criterion has served the country well. From a domestic perspective, the speech outlines the need for regulators to be strong, independent and accountable and underlines that this should be maintained in light of government resourcing restraints.
Having discussed the problem of ‘too big to fail’ banks is then discussed in detail, the speech then outlines four key issues raised in the Bank's submission to the Inquiry – efficient allocation of savings, provision of liquidity services to the community, provision of payment services and the appropriate recognition of risk and who should bear it. The topic of risk-taking is then explored in more detail and it is noted that whilst there is a great deal of financial risk-taking in the global economy, there is little risk-taking in the real economy. It underlines the financial system's role in supporting risk-taking in the real economy and notes that the financial system should be ‘the handmaiden of the industry’.