Financial System Inquiry (1996) Final Report

Publication type



In accordance with its Terms of Reference, the Inquiry has confined its attention to the main fields of financial regulation, including those which aim to improve market conduct, disclosure, safety, stability, competition and competitiveness.

The Inquiry has not made specific recommendations on the conduct of monetary policy, retirement incomes policies, taxation policies, or the regulation of the general operation of companies through corporations law. However, these issues have been taken into account in formulating recommendations on other financial regulatory arrangements and some potential links or conflicts have been noted for possible future study.

For reasons of efficiency, the Final Report does not repeat most of the material provided in the Discussion Paper released in November 1996. In particular, reference should be made to the Discussion Paper for:

  • a more complete description of the existing regulatory arrangements for the Australian financial system;
  • summaries of the views put to the Inquiry in the first round of submissions; and
  • a more complete description of the alternative options for changes to current regulatory arrangements. 



The Report's Overview (The Financial System: Towards 2010) summarises the Inquiry's vision for the future, the Inquiry's regulatory philosophy and a blueprint for proposed regulatory reform. This blueprint is followed by a full list of the Inquiry's recommendations.

The remainder of the Final Report is structured in three parts.

  • Part One: Forces for Change canvasses the major factors driving change in the financial system, including changing customer needs, new skills and technologies, and regulatory change. Part One also describes consequent changes in the conduct and structure of financial markets and businesses.
  • Part Two: Key Issues in Regulatory Reform sets out the philosophy of financial regulation adopted by the Committee and examines the costs of financial activity in Australia. Part Two describes a broad range of reforms aimed at improving financial system efficiency. It presents the Inquiry's recommendations for financial regulation, including arrangements for market integrity, consumer protection, safety, stability and competition.
  • Part Three: Stocktake of Financial Deregulation provides a history of the changes in financial regulation in Australia and reports on the results of the deregulation flowing from the Campbell Committee. It examines the impact of financial deregulation on competition, efficiency, international competitiveness, and product choice and quality in the Australian financial system.

Appendix D contains the Inquiry's review of financial system legislation required under the Competition Principles Agreement.

This publication is the final report of the 1997 Financial System Inquiry ('The Wallis Inquiry'). This publication also provides background information relevant to the 2014 Financial System Inquiry ('The Murray Inquiry').