Financial deregulation and monetary policy in Australia
Keywords:Australia, financial deregulation, floating currency, monetary policy
In recent years, the pace of financial deregulation in Australia has accelerated. Less reliance on direct controls, a floating currency and a less regulated banking system will all serve to transform the Australian financial system, but what will this imply for policymakers? The present article addresses the question from a monetary policy viewpoint and establishes some of the difficulties that policy makers are likely to face as the system evolves. Perhaps the most crucial test facing authorities is the need to strike an ‘appropriate’ balance between preserving the stability of the payments system and ensuring competitive equity between financial intermediaries, bank and non-bank.
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