NO.026

AUSTRALIA’S FINANCIAL SECTOR ASSESSMENT PROGRAM

As part of a programme that has been undertaken in over 100 countries, the

International Monetary Fund (IMF) and World Bank will now conduct a Financial

Sector Assessment Program (FSAP) in relation to Australia.

Australia’s financial system is strong and compares well internationally.

The FSAP can be expected to highlight the strengths of the Australian financial

system, but any recommendations which would strengthen and further improve the

Australian financial system will receive close attention by the Government.

The FSAP is a joint programme of the IMF and World Bank designed to assess

the stability of individual countries’ financial systems. It provides

a rigorous and comprehensive analysis of financial soundness, governance framework

and official oversight and regulation of the financial system. The programme

involves assessment of Australia’s observance of various financial sector

codes and standards, and consideration of issues such as any risks to macroeconomic

stability stemming from the financial sector and the capacity of the sector

to absorb macroeconomic shocks.

A mission team of international experts will be appointed by the IMF to undertake

the FSAP. This team is expected to visit Australia during 2005 and 2006. The

team will visit financial sector participants as well as government officials

and regulators. Financial sector participants will also have active involvement

in parts of the FSAP work programme. Further information on the FSAP is available

on the IMF’s web-site at http://www.imf.org/external/np/fsap/fsap.asp.

CANBERRA

4 April 2005

Contact: David Alexander

(02) 6277 7340