The Financial Sector and Deregulation in Australia: Drivers of Reform or Reluctant Followers?

Abstract

This paper argues that contrary to capture theory, a key feature of financial deregulation in Australia was the lack of support from financial sector interest groups. An examination of the Campbell Inquiry (1979–1981) reveals that deregulation was not initiated by either the regulated banks or unregulated non-bank financial institutions (NBFIs). In fact, both groups were resistant to change prior to the establishment of the Inquiry. During the Inquiry, neither group advocated wide-ranging deregulation, preferring the retention of many financial regulations.