Financial deregulation and monetary policy in Australia


  • M.J.B. HALL



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.


JEL: E52


BEQB, "Tbe nature aod implications DE financial innovation", September 1983.

BILSON, ].F.<?, "Australian. Financial Reform: Implications aod Alternatives", Chapter 3 in

A New Fmanctal Revolutton, Centre for lndependent Studies, 1982.

CORRTGAN, C.D., <'What Happens ta Merchant Banks?" paper delivered at tbe Rydges Conference

"1he lmplications of the Campbell Report") 1982. -

DAVIS K.T. and LEWIS M., "Monetary Tactics aod Monerary Targets: A Guide ta Post-Campbell

Monetary Policy" Economie Papers (The Campbell Report), ApriI 1983.

DAVI'), KT., "Reserve Requiremem Changes as a Maoetary Instrumcnt", Emnomks Depanment

Working Paper No. 81-10, Uoiversity af Adelaide, 1981. :

DAVIS, K.T., "Financial Regulation in Australia", paper presented to the 13th Conjerence oj

Eeonomùts, Perth, Australia, August 1985.

FRENKEL, J,A., "Tbe Collapse of Purchasing Pawer Parities During the 1970s" European

Economie Review, 16, pp. 145-65, February 1981. '

HALL, M.J,B., Monetar;l Policy Sinee 1971: Conduet and Pe1/ormanee, The Macmillan Press, 1983.

HALL, M,J.B., "Pinancial Deregulation in Australia", Nationat Westminster Quarterly Bank

Review, (August 1985).

HARPER, I.R., "Some Speculatioo 00 the Loog-Term Implications af Financial Deregulation and

Innovation", paper presented to the 13th Conjerence ojEconomists, Perth, Australia, August

HOGAN, W.P., and SHARPE LG., "00 Prudential Controls", EconomiePapers, April1983.

PERKINS, J,O.N., T'he Austratian Financial5)lStem after the Campbefl Report, Mdbourne University

Press, 1982.

R.RA., Reserve Bank ojAustralia: Funetions and Operations, 4th cdition, 1983.

STEARN, G. and TRESS R, "Australlan Bank Mergers af 1981: Their Motivatioo and Effeets"

Bulletin ofMoney, Banking and Finanee, 1983-84, No.2, Centre fOr Studies in Money, Bank:~

aod Finance, Macquarie University, NSW, Australia, 1983. '

THURLOE,]. and VALENTINE T,J., "Finandal Innavations and the Demand far Money", paper

presented to the Finandat Innovations Conjerenee, Melbourne, Australia, 1984.

VALENTINE, T.]., "Campbell and tbc Critics", Economie Fa!Jers, April1983.

VALENTINE, T.]., "Recent Australian Monetary Policy", Bulletin 01 Moltey, Banking and FÙlance,

/84, No.3, Ceotre far Studies in Money, Banking and Finance, Macquarie University

NSW, Australia, 1984. '

WOOD, G.E., "Competition, Innovation, Consumer Protection and tbe Role of the Market: The

Philosophy of tbe Campbell Report", Ch. 4, Palt IImA New Finandal Revolution, Centre for

Independent Studies, 1982.




How to Cite

HALL, M. (2013). Financial deregulation and monetary policy in Australia. PSL Quarterly Review, 38(154).