Assessment Round: October 2014 Completion Date: 2015
The Financial System Inquiry identified the international competitiveness of Australia’s financial services sector as a high priority for policy makers given profound changes in Asia. Yet how the sector is defined, and the measures for competitiveness, are poorly understood.
The research seeks to examine the drivers behind the creation of international financial centres, specifically focusing on the importance of cities in driving regional and international competition.
The research findings suggested that, in order to grow Sydney’s status as an international financial centre (‘IFC’) by this measure, all levels of government in Australia need to:
(a) support competition measures in the non-finance sectors of the economy, and
(b) encourage organizations to centralize operations within a dominant city centre, rather than decentralize operations nationally across cities.
In addition, flexible, cross-border labour flow is crucial. At the same time, counter-intuitively, sector-specific measures such as corporate taxation had limited impact on growth in cross-border fees in financial services, though measures related to individual personal taxation were relevant.
Implications for existing policy initiatives might include greater deployment of labour mobility in current regional free trade negotiations.
Initiatives might include:
(a) an Asia working visa for the financial services sector;
(b) better labour mobility through regional partnerships between Top 500 universities in Asia, and
(c) pro-competition measures that attract multi-nationals to compete locally in the non-finance sectors.
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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