27 May 2009

Australia Ranked 2nd Global Financial Centre

The Finance Industry Council of Australia (FICA) welcomes the findings of the World Economic Forum’s second annual Financial Development Report1 which ranks Australia second in the world as a global financial centre.

The United Kingdom came in first, third was the United States of America. Australia moved up to second place from its 2008 ranking of 11th.

The World Economic Forum’s rankings of 55 financial centres are based on a number of measures of financial development including: institutional environment, business environment, financial stability, banking financial services, non-banking financial services, financial markets and financial access.

The report states:

“Australia comes in 2nd in the overall rankings and leads the region through solid performance in both banking (5th) and non-banking (3rd) financial services. The efficiency of its banks, where it earns 1st place in the rankings, is a key strength; the stability of its banking system (10th) and a low risk of sovereign debt crisis (1st) underpins its relatively high degree of financial stability through the current crisis. A less-developed bond market is one of the country’s few weak spots, particularly in terms of public domestic bond market capitalization (34th). Australia’s relative weakness in commercial access to capital (21st) is offset by its high level of retail access to capital (1st), enabling Australia to achieve the highest level of overall financial access in the Index.”

The World Economic Forum, based in Geneva, is best known for its annual Davos conference of world business leaders.

Chairman of FICA, Duncan Fairweather, said: “This excellent result demonstrates the strength of the Australian financial system and its resilience in the face of the unprecedented global financial crisis.”

“The second place ranking highlights the need for the financial services sector and the Government to continue to work hand-in-hand on developing Australia as a global financial services centre.”

“There is still more to do in relation to reforms in regulatory policy and taxation. We look forward to the report of the Australian Financial Centre Forum, which we hope will make recommendations on these and other issues, necessary to further cement Australia’s place as a global financial centre.”

“Ratings of financial centres do change year-on-year and have been particularly volatile during the global financial crisis. That’s why we have to continue to improve our business environment so that Australia remains near the top of the rankings in the years to come.”

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