Background to the Inquiry

On 20 November 2013, the Treasurer, the Hon. Joe Hockey MP, released a draft terms of reference for the Financial System Inquiry (the Inquiry) for consultation with interested stakeholders.

After completing this consultation process on 20 December 2013, the Treasurer released the final terms of reference and appointed a Committee, independent of Government, to undertake this task. The members of the Committee are listed on the following pages.

The Committee was charged with examining how the financial system could be positioned to best meet Australia’s evolving needs and support Australia’s economic growth.

On 24 March 2014, the Treasurer appointed an International Advisory Panel (the Panel) to the Inquiry. The Panel’s role was to provide the Inquiry with an expert perspective on aspects of the terms of reference, including technological change, Australia’s global competitiveness and offshore regulatory frameworks. The members of the Panel are also on the following pages.

Financial System Inquiry Terms of Reference


The Inquiry is charged with examining how the financial system could be positioned to best meet Australia’s evolving needs and support Australia’s economic growth.

Recommendations will be made that foster an efficient, competitive and flexible financial system, consistent with financial stability, prudence, public confidence and capacity to meet the needs of users.

Terms of reference

  1. The Inquiry will report on the consequences of developments in the Australian financial system since the 1997 Financial System Inquiry and the global financial crisis, including implications for:
    1. how Australia funds its growth;
    2. domestic competition and international competitiveness; and
    3. the current cost, quality, safety and availability of financial services, products and capital for users.
  2. The Inquiry will refresh the philosophy, principles and objectives underpinning the development of a well-functioning financial system, including:
    1. balancing competition, innovation, efficiency, stability and consumer protection;
    2. how financial risk is allocated and systemic risk is managed;
    3. assessing the effectiveness and need for financial regulation, including its impact on costs, flexibility, innovation, industry and among users;
    4. the role of Government; and
    5. the role, objectives, funding and performance of financial regulators including an international comparison.
  3. The Inquiry will identify and consider the emerging opportunities and challenges that are likely to drive further change in the global and domestic financial system, including:
    1. the role and impact of new technologies, market innovations and changing consumer preferences and demography;
    2. international integration, including international financial regulation;
    3. changes in the way Australia sources and distributes capital, including the intermediation of savings through banks, non-bank financial institutions, insurance companies, superannuation funds and capital markets;
    4. changing organisational structures in the financial sector;
    5. corporate governance structures across the financial system and how they affect stakeholder interests; and
    6. developments in the payment system.
  4. The Inquiry will recommend policy options that:
    1. promote a competitive and stable financial system that contributes to Australia’s productivity growth;
    2. promote the efficient allocation of capital and cost efficient access and services for users;
    3. meet the needs of users with appropriate financial products and services;
    4. create an environment conducive to dynamic and innovative financial service providers; and
    5. relate to other matters that fall within this terms of reference.
  5. The Inquiry will take account of the regulation of the general operation of companies and trusts to the extent this impinges on the efficiency and effective allocation of capital within the financial system.
  6. The Inquiry will examine the taxation of financial arrangements, products or institutions to the extent these impinge on the efficient and effective allocation of capital by the financial system, and provide observations that could inform the Tax White Paper.
  7. In reaching its conclusions, the Inquiry will take account of, but not make recommendations on the objectives and procedures of the Reserve Bank in its conduct of monetary policy.
  8. The Inquiry may invite submissions and seek information from any persons or bodies.

The Inquiry will consult extensively both domestically and globally. It will publish an interim report in mid-2014 setting out initial findings and seek public feedback.

A final report is to be provided to the Treasurer by November 2014.

Financial System Inquiry Committee

Mr David Murray AO (Chair)

Mr David Murray AO (Sydney) was most recently the inaugural Chairman of the Australian Government’s Future Fund Board of Guardians between 2006 and 2012. Mr Murray was previously the Chief Executive Officer of the Commonwealth Bank of Australia between 1992 and 2005. In this time, Mr Murray oversaw the transformation of the Commonwealth Bank from a partly privatised bank to an integrated financial services company.

In 2001, he was awarded the Centenary Medal for service to Australian society in banking and corporate governance, and in 2007 he was made an Officer of the Order of Australia for his service to the finance sector, both domestically and globally, and service to the community.

Professor Kevin Davis

Professor Kevin Davis (Melbourne) is currently a Professor of Finance at the University of Melbourne, Research Director at the Australian Centre for Financial Studies and a Professor of Finance at Monash University. Professor Davis is also a part-time member of the Australian Competition Tribunal and Co-Chair of the Australia–New Zealand Shadow Financial Regulatory Committee.

Mr Craig Dunn

Mr Craig Dunn (Sydney) was most recently Chief Executive Officer and Managing Director of AMP. Mr Dunn led AMP through the global financial crisis and has extensive experience in the financial sector. He was a member of the Australian Government’s Financial Sector Advisory Council and the Australian Financial Centre Forum, and an executive member of the Australia Japan Business Co-operation Committee. Mr Dunn is a director of the Australian Government’s Financial Literacy Board.

Ms Carolyn Hewson AO

Ms Carolyn Hewson AO (Adelaide) served as an investment banker at Schroders Australia for 15 years. Ms Hewson has over 30 years’ experience in the finance sector and currently serves on the boards of BHP Billiton Ltd and Stockland. Ms Hewson was made an Officer of the Order of Australia for her services to the YWCA and to business. Ms Hewson has served on both the boards of Westpac and AMP and retired from the board of BT Investment Management Ltd and as the Chair of the Westpac Foundation upon her appointment to the Financial System Inquiry Committee.

Dr Brian McNamee AO

Dr Brian McNamee AO (Melbourne) served as the Chief Executive Officer and Managing Director of CSL Limited from 1990 to 30 June 2013. During that time, CSL transitioned from a Government-owned enterprise to a global company with a market capitalisation of approximately $30 billion. He has extensive experience in the biotech and global healthcare industries. Dr McNamee was made an Officer of the Order of Australia for his service to business and commerce.

International Advisory Panel

Sir Michael Hintze AM

Sir Michael Hintze (London) is the founder and Chief Executive Officer of CQS, a global multi-strategy asset management firm. Prior to founding CQS, Sir Michael held senior roles at Credit Suisse First Boston and Goldman Sachs. He was made a Member of the Order of Australia for his support to the arts, health and education, and awarded a knighthood for his philanthropic services to the arts in the United Kingdom.

Dr David Morgan AO

Dr David Morgan (London) is currently the head of private equity group JC Flowers & Co. in Europe and the Asia-Pacific region. Dr Morgan was previously Chief Executive Officer of Westpac Banking Corporation and a deputy secretary of the Australian Treasury, and he has also worked for the International Monetary Fund. He was made an Officer of the Order of Australia in 2009 for his service to the finance sector.

Ms Jennifer Nason

Ms Jennifer Nason (New York) is Global Chairman of Technology, Media and Telecom Investment Banking at JPMorgan Chase & Co. In her 28-year tenure at the bank, Ms Nason worked around the world on mergers, acquisitions, and debt and equity financings, and in strategic advisory roles for technology, media and telecommunications companies.

Mr Andrew Sheng

Mr Andrew Sheng (Hong Kong) is a well-known former central banker and financial regulator in Asia and a leading commentator on global finance. He is a Distinguished Fellow and former President of the Fung Global Institute, a Hong Kong–based global think tank, and previously held senior positions in the Securities and Futures Commission of Hong Kong, the Hong Kong Monetary Authority and the World Bank. In 2013, TIME listed Mr Sheng as one of the world’s 100 most influential people.


The Committee wishes to thank the large number of stakeholders who freely gave their time to make submissions, participate in public consultations and meetings with the Inquiry, or assist with research. The Committee acknowledges the assistance of:

  • The public and private sector organisations that provided expertise and resources to the Secretariat.
  • Treasury, the Reserve Bank of Australia, the Australian Prudential Regulation Authority, the Australian Securities and Investments Commission and the Australian Taxation Office.
  • The large number of international agencies, regulators and financial system participants that the Committee met with during international consultation.
  • Mr Bruce White, the New Zealand observer to the Inquiry.
  • The Centre for International Finance and Regulation, and the Australian Centre for Financial Studies.
  • Ms Karen Pryor for editing services.

Finally, the Committee wishes to acknowledge the support provided by all members of the Secretariat:

John Lonsdale (Head of Secretariat), Mark Adams, Sarah Alland, Geoff Atkins, Debbie Banerjee, Ian Beckett, Percy Bell, Camille Blackburn, Kylie Bourke, Adam Cagliarini, Lynda Coker, Jason Collins, Andrew Craston, Kathryn Dolan, George Gardner, Glen Granger, Jacob Hook, Darren Kennedy, Amanda Kirby, Suh Mian Ng, Brad Parry, Amber Rowland, Daniel Royal, Luke Spear, Thomas Stapp, Melisande Waterford, Julia Wells, Vicki Wilkinson, Callan Windsor and Chris Zwolinski.