• University of New South Wales
  • Macquarie University
  • The University of Sydney
  • University of Technology Sydney
  • Australian National University
  • The University of Melbourne
  • Capital Markets
  • Sirca
  • Commonwealth Bank
  • KPMG
  • King & Wood Mallesons
  • Macquarie
  • Australian Government - Treasury
  • New South Wales Goverment

CIFR Research Project

Regulation and Reforms to Enhance Financial Stability in the Post-GFC Era - E137
Assessment Round: November 2012  Completion Date: 2013
Project Summary

The global financial crisis (GFC) challenged a central assumption concerning the market’s efficiency, rationality and ability to self-regulate that had underpinned prior financial law. It has been said that the intellectual origins of the global financial crisis (GFC) can be traced back to “blind spots” in traditional financial theory, which obscured complexity and financial innovation in contemporary markets. There has been a growing recognition that changes to the modern market, including the effects of globalisation, extreme mobility of capital, and technological advances require corresponding changes in regulatory approach and structure. The crisis highlighted the need for specific regulation to enhance financial market stability, and the importance of ensuring that such regulation is both informed and effective.


The project aimed to assess the adequacy and efficacy of Australia’s legal infrastructure in three specified areas:

  • Financial Market Regulation - The research examines Australia's regulatory framework, and the governance structure of its financial market regulators, from a comparative and policy-based perspective. It examines the similarities and differences between Australia’s regulatory frameworks and those of a number of overseas jurisdictions.
  • Tax – The study assesses the effectiveness of initiatives to promote international transparency, and measures aimed at confronting international corporate tax avoidance.
  • Banking and Finance – The study investigates the application of a recently implemented federal statutory regime to specific financial market transactions, and the consequences for the identification and quantification of counterparty risk. Specifically, title transfer collateralisation arrangements, such as repos and securities lending, are analysed to establish the extent to which such arrangements might now amount to a security interest within the definition of the Personal Property Securities Act 2009 (Cth) s 12(1), and the effectiveness of the current statutory exclusions of specific interests from this definition.


In the context of Financial Market Regulation, the research finds Australia’s ‘twin peaks’ model proved itself superior to the respective regulatory systems of the US and the UK during the global financial crisis (GFC). The Australian model now serves as a regulatory blueprint for many countries around the world, including the UK. The robustness of Australia’s regulatory framework during the GFC provides opportunities for Australian law and governance structures to perform an influential role, particularly in Asia. The research also finds interesting differences across jurisdictions in terms of the governance structure of regulators. Further, it considers the adoption of these different governance paradigms in addressing regulatory deficiencies.


In relation to Taxation, the research indicates the Australian and global response to the GFC stands in stark contrast to that in the context of financial regulation. Rather than question the effectiveness of the regulator and the structure of regulation through a detailed examination of regulatory failures, the response shows a continuation of previous practice. This includes calls for more transparency and more attacks on tax avoidance, without any significant consideration of the underlying policies, or the associated benefits and costs, specifically the diversion of attention from other important policy initiatives. In developing policy and regulatory responses to financial crises in the area of tax, more attention needs to be given to the operation of income tax, and less to the revenue shortfalls prompted by the crisis.


In terms of Banking and Finance, the research suggests that the transfer collateralisation arrangements such as repos and securities lending may indeed fall within the definition of ‘security interest’, and that the current exclusions may not prove to be as comprehensive as financial market participants may currently expect. The research shows a key legal difference in approach under Australian law versus other common law countries, including the United Kingdom and the US, in suggesting the need to have the issue more widely canvassed within the relevant financial markets. The research also suggests some consideration of what amendments may be necessary to the PPSA to facilitate appropriate market practice.


This research has been presented at local and international conferences including:

Ross Parsons Centre Corporate Law Seminar Series
Sydney, Australia (2013)


2nd Geneva-Harard-Renmin-Sydney Conference
Beijing, China (2014)

Conference on International Corporate Governance and Public International Law
Istanbul, Turkey (2013)

  Developments in Corporate Law and Governance – East Meets West
Sydney, Australia (2014)

The Law and Economics of Taxation Conference
Munich, Germany (2013)





This research has also been presented to:

University of Ghent Law School
Belgium (2013)


  A Specialist Roundtable of leading Australian Legal Practitioners Sydney
Australia (2014)

Queen Mary University
UK (2013)


  Hong Kong University
Hong Kong (2014)

University of British Columbia Law School
Canada (2013)


  Centre for Cross-Border Commercial Law in Asia, Singapore Management University Singapore (February 2015)

The Statutory Review of the Personal Property Securities Act 2009 established by the Australian Government Attorney-General’s Department
Australia (2014)




Team Leader:
Professor Jennifer Hill | Director of the Ross Parsons Centre of Commercial, Corporate and Taxation Law, Sydney Law School, The University of Sydney
Professor Graeme Cooper | Taxation Law, Sydney Law School, The University of Sydney
Professor Michael Dirkis | Taxation Law, Sydney Law School, The University of Sydney
Professor Sheelagh McCracken | Finance Law, Sydney Law School, The University of Sydney
Professor John Stumbles | Finance Law, Sydney Law School, The University of Sydney
Professor Greg Tolhurst | Acting Dean, Sydney Law School, The University of Sydney
Professor Richard Vann | Challis Professor of Law, Sydney Law School, The University of Sydney
Project Outputs:


The Centre for International Finance and Regulation (CIFR) represents a strategic link between academia, financial regulators, policy makers and industry, promoting financial sector vibrancy, resiliency and integrity, through leading research and education.

CIFR receives funding and support from the Commonwealth and NSW Governments, and its industry, university and research centre partners.



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