'Son of Wallis' head announced

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The first major inquiry into Australia's financial system in 16 years will be headed by former Future Fund chairman David Murray.

In an address to the Australian Chamber of Commerce and Industry last night, Prime Minister Tony Abbott and Treasurer Joe Hockey announced Murray will lead the so-called "Son of Wallis" inquiry, to make recommendations for a more efficient, competitive and flexible financial system.

These recommendations should be consistent with financial stability, prudence, integrity and fairness and should result in fewer costs, lower fees and greater efficiency in the allocation of capital, Abbott said.

Part of the Government’s broader deregulation agenda, the inquiry will look at how to minimise Australia’s exposure to volatility in global capital markets, and how to balance competition with consumer protection.

It is 16 years since Stan Wallis led a similar inquiry and 32 years since Sir Keith Campbell undertook the first major investigation into Australia’s financial system.

The findings of both these inquiries led to major reforms.

Murray – the former Commonwealth Bank chief executive – will head a committee of four Australians representing the finance, business and academic sectors.

Among its considerations, the inquiry will be asked to report on:

  • How the financial system can more efficiently allocate Australian sourced capital to minimise exposure to volatility in global capital markets
  • How Australia can best balance competition, innovation and efficiency, with stability and consumer protection
  • The role and impact of new technologies, market innovations and changing consumer preferences
  • International integration, including international financial regulation.

Draft terms of reference for the inquiry have been released and submissions are open until 5 December.

Following feedback, final terms of reference and the final composition of the inquiry will be announced in mid-December. The inquiry will publish an interim report by September next year and deliver a final report by November.