Why Did Australia Fare So Well in the Global Financial Crisis?

THE REGULATORY AFTERMATH OF THE GLOBAL FINANCIAL CRISIS, E. Ferran, N. Moloney, J. G. Hill, and J. C. Coffee, Jr. Cambridge University Press, 2012, pp 203-300

Sydney Law School Research Paper No. 12/35

60 Pages Posted: 21 May 2012 Last revised: 20 Dec 2013

Jennifer G. Hill

University of Sydney - Faculty of Law; European Corporate Governance Institute (ECGI)

Date Written: May 20, 2012

Abstract

Some jurisdictions weathered the global financial crisis far better than others. Australia has attracted much attention in view of the fact that its economy performed particularly well during the crisis compared to the United Kingdom and the United States.

The chapter explores why the Australia fared so well in the crisis compared to these other common law jurisdictions. A stock answer to this question has been that Australia was “lucky”, in that its economy was buoyed by China’s growing demand for resources. Although strong trade links with China undoubtedly constituted part of the puzzle in this regard, this chapter argues that there are a number of other relevant, but under-appreciated, factors which contributed to Australia’s resilience during the crisis.

These factors include monetary and fiscal policy; legal structures and reform; financial market regulation; banking history; and corporate governance. The chapter explores these specific factors from a comparative perspective, demonstrating key differences in their operation in Australia during the crisis. Australia’s experience of the global financial crisis is a reminder that financial markets do not operate in a vacuum, but rather form part of a complex economic, legal and regulatory ecosystem.

Keywords: global financial crisis, corporate crises, financial market regulation, regulatory structure, prudential regulator, Australia, monetary policy, economic stimulus program, HIH collapse, Australian banking system, superannuation

JEL Classification: E58, G18, G28, G30, G32, G34, K20, K22, K23, M14, O16

Suggested Citation

Hill, Jennifer G., Why Did Australia Fare So Well in the Global Financial Crisis? (May 20, 2012). THE REGULATORY AFTERMATH OF THE GLOBAL FINANCIAL CRISIS, E. Ferran, N. Moloney, J. G. Hill, and J. C. Coffee, Jr. Cambridge University Press, 2012, pp 203-300; Sydney Law School Research Paper No. 12/35. Available at SSRN: https://ssrn.com/abstract=2063267

Jennifer G. Hill (Contact Author)

University of Sydney - Faculty of Law ( email )

New Law Building, F10
The University of Sydney
Sydney, NSW 2006
Australia
+61 2 9351 0280 (Phone)
+61 2 9351 0200 (Fax)

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

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