Press Release

While Australia survived the recent Global Financial Crisis relatively unscathed, business as usual will not be enough to secure a productive future for Australians, according to Minter Ellison’s financial services experts. A key aspect of the firm’s recent submission to the Financial System Inquiry (FSI) highlights the need for a considered but significant restructure of Australia’s financial systems.

The submission places a strong emphasis on emerging challenges both at home and regionally - and the need for considered regulatory change to prepare Australia for the rapid transformation now taking place in regional Asian economies and local Australian demographics.

“While regulation is a necessary cost of business to ensure an efficient and fair market for services and products, we don’t believe there has been sufficient focus on facilitating innovation, efficiency and competition for the future," says Richard Batten, Minter Ellison's Financial Regulation Partner.

He said the emergence of Asia as a global powerhouse will have a significant impact on Australia this century and the Inquiry should consider what can and should be done to prepare Australia and our financial system for that impact.

“The shift in the global axis of power from the Atlantic to the Pacific, the decreasing significance of the US economy and financial system, and changes to the composition of the G20 are the three waves of change we believe highlight the pressing need to deliver a system that will meet 21st century needs in Australia. The Panel's recommendations should give significant weight to regional approaches to regulation,” said Mr Batten.

Mr Batten noted the comments made by Banking & Finance partner David Eterovic in that section of Minter Ellison's FSI submission that there needs to be an examination of how to best regulate these sectors. "In particular, David highlights the importance of examining systemically important institutions and minimising barriers to capital raising.”

Minter Ellison's submission argues there should be significant opportunities for managed investments and the wealth sector as Asian economies transform into robust consumer markets for the middle classes. However, this requires regulatory change to ensure Australia is best placed to take advantage of these opportunities.

In the Australian superannuation sector, managing and investing a significantly increasing capital pool and meeting the demands of an aging demographic were identified as key challenges for the FSI.

"Our tax system must also deliver reforms that will enable us to compete internationally – and as Karen Payne, one of our tax partners, argues in the submission, that needs to be without onerous cost and compliance burdens,” said Mr Batten.

“At the same time, the FSI must consider the impacts of new payment systems and technologies for our local markets, and the elimination of inefficiencies in areas where Australia’s financial systems overlap global structures."

Minter Ellison’s FSI submission provides detailed discussion of opportunities for reform and improvement of Australia's regulatory system as well as specific issues in five key areas of: Taxation; Banking, Finance and Capital Markets; Financial Advice; Insurance; Managed Investments; and Superannuation.

The submission also highlights the fact that Australia also operates in the global regulatory context where banking, securitisation and derivatives have been subject to extensive regulation by offshore bodies.

“Some of this regulation impacts Australian institutions through the extra-territorial scope of the relevant legislation. Some regulation is implemented by the Australian government to reflect commitments provided by the Australian government at organisations such as the G20,” Mr Batten said.

“As John Elias, our leading debt markets partner argues in the submission, this trend to offshore regulation impacting Australian institutions is likely to continue and must be included with the scope of the FSI as an umbrella consideration across the key areas identified,” Mr Batten concluded.

An Executive Summary of our submission can be found here.

For more information, please contact:

Maria Nadalin
Public Relations Manager, Minter Ellison
T +61 7 3119 6179 │ M +61 (0)412 366 743