This Financial Policy Brief was submitted to the Productivity Commission’s Inquiry into Data Availability and Use.
The availability of good information about the Australian financial sector and financial institutions is crucial for efficiency, stability and policy. Unfortunately, the current situation is far from ideal, but could be easily improved with some legislative changes that would bring the Australian situation more into line with overseas practice.
Before identifying some significant possible changes, it is worth noting the benefits of improved data. They include:
- Improved market discipline of financial institutions by investors – which is one of the ‘three pillars’ of prudential regulation identified by the Basel Committee.
- Better ability of consumers of financial products and their advisers to identify the risks and suitability of those products.
- Enhanced research opportunities, which enable better understanding of the dynamics of the financial sector, governance etc., which it turn can lead to improved economic and financial policy.
This paper was prepared by Professor Kevin Davis, Research Director of the Australian Centre for Financial Studies.
The ACFS Financial Policy Brief series provides independent analysis and commentary on current issues in financial regulation with the objective of promoting constructive dialogue among academics, industry practitioners, policymakers and regulators and contributing to excellence in Australian financial system regulation.
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