The Financial Crisis Inquiry Commission has launched an inquiry into the causes of the financial crash.
The inquiry, which will be chaired by Senator Nick Xenophon, will also look at the role of regulators and the role that industry is playing in helping to manage the fallout from the financial system.
“We are not a nation of complacent savers,” Senator Xenophon said in a statement.
The inquiry is due to publish its report in October. “
The Government is now working with the sector and with the Government of Australia, and I am confident that our inquiry will find a clear path forward to ensure the nation gets back on its feet.”
The inquiry is due to publish its report in October.
It will be made up of three independent experts, including two from the Financial Stability Commission.
The commission will also investigate whether regulators and regulators themselves were negligent in the financial sector, and whether they did enough to protect the Australian people.
Senator Xenophon says his inquiry will also examine the role industry is being given by government.
He says there is an opportunity for Australia to move towards a more responsible approach to the financial markets.
“There is no doubt that we need to work more closely with the industry to prevent the risk of a financial crisis from arising again,” Senator Monckton said.
‘There is a danger of an industry-driven collapse’Senator Xeno said his inquiry would also look into the role regulators and industry are being given to manage a financial system that has been hit by the Great Recession.
Under the Financial Services Act, regulators have the power to restrict lending, to force companies to reduce their spending, and to issue bonds.
They are also required to ensure that banks are able to take out more loans and to maintain an adequate balance sheet.
A report by the Financial Commission of Australia last year recommended the Australian Government should provide more financial support to the banking sector to ensure it has the capacity to weather the storm.
The report said that in Australia, “there is a clear danger that the financial services industry will be too large to adequately manage”.
“This risk is particularly acute in light of the lack of confidence in financial institutions by the public, the potential for a significant reduction in funding for banks, and the possibility of an increase in risks and vulnerabilities in the banking system,” it said.
“A significant proportion of the public do not believe that the banking industry can adequately manage a banking crisis, and are concerned that a financial sector that cannot be regulated and managed effectively will be a financial service industry that will become too large.”
“There are significant risks to the solvency of the Australian banking system, including the possibility that financial institutions will be unable to meet their obligations to pay creditors and to support the economy,” the report said.
The inquiry has previously heard that some of the largest banks were not in a position to lend in the days following the financial market crash.
In May, Senator Xeno released a report recommending that the Federal Government introduce new financial regulation laws to better protect the financial industry.
Since then, the Federal Parliament has passed a number of bills to strengthen the role banks play in the economy.
On Thursday, the Australian Senate passed a bill to overhaul the role and regulatory framework of the Commonwealth Bank.