Friday, November 27, 2009

Australia's well-developed and highly competitive financial sector

Australia's well-developed and highly competitive financial sector provides a wide range of products and services through advanced banking, insurance, and equity industries. Government regulation of banks is minimal, and foreign banks, licensed as branches or subsidiaries, offer a full range of banking operations. As of October 2007, Australia had 55 licensed financial institutions: 14 Australian-owned banks and 41 foreign-owned banks. An additional 20 foreign banks have maintained representative offices. Though it has regulatory power to set lending policies and interest rates, the central bank has not exerted this authority since the deregulation of financial markets in the 1980s. There are no government-owned banks, and banks are highly competitive. Foreign insurance companies are permitted, and regulation is focused on capital adequacy, solvency, and prudential behavior. With 1,900 entities listed and their total market capitalization of over $900 billion, the Australian Stock Exchange is the world's eighth largest.

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