This report responds to the objective in the Inquiry’s Terms of Reference to best position Australia’s financial system to meet Australia’s evolving needs and support economic growth. It offers a blueprint for an efficient and resilient financial system over the next 10 to 20 years, characterised by the fair treatment of users.

The Inquiry has made 44 recommendations relating to the Australian financial system. These recommendations reflect the Inquiry’s judgement and are based on evidence received by the Inquiry. The Inquiry’s test has been one of public interest: the interests of individuals, businesses, the economy, taxpayers and Government.

Australia’s financial system has performed well since the Wallis Inquiry and has many strong characteristics. It also has a number of weaknesses: taxation and regulatory settings distort the flow of funding to the real economy; it remains susceptible to financial shocks; superannuation is not delivering retirement incomes efficiently; unfair consumer outcomes remain prevalent; and policy settings do not focus on the benefits of competition and innovation. As a result, the system is prone to calls for more regulation.

To put these issues in context, the Overview first deals with the characteristics of Australia’s economy. It then describes the characteristics of and prerequisites for a well-functioning financial system and the Inquiry’s philosophy of financial regulation.

The Inquiry focuses on seven themes in this report (summarised in Guide to the Financial System Inquiry Final Report).

The Overview deals with the general themes of funding the Australian economy and competition.

The Inquiry has also made recommendations on five specific themes, which comprise the next chapters of this report:

• Strengthen the economy by making the financial system more resilient.
• Lift the value of the superannuation system and retirement incomes.
• Drive economic growth and productivity through settings that promote innovation.
• Enhance confidence and trust by creating an environment in which financial firms treat customers fairly.
• Enhance regulator independence and accountability and minimise the need for future regulation.

These recommendations seek to improve efficiency, resilience and fair treatment in the Australian financial system, allowing it to achieve its potential in supporting economic growth and enhancing standards of living for current and future generations.