Asia only one-third of Australia’s financial relationships
Despite Asia representing two-thirds of Australia's global trading relationships there are significant inhibitors to financial integration with the region arising from within the country's financial system, according to a financial services body.
The Financial Services Institute of Australasia (Finsia) found in its "Financial Integration in the Asia-Pacific: Fact and Fiction" report that Asia only accounts for less than one third of Australia's cross-border financial relationships.
The study found Australia's investment relationships remained skewed toward the traditional trading partners of the US, UK, and New Zealand.
Finsia's chief executive, Russell Thomas, said financial services contributed about nine per cent of gross value added to the nation and was the largest single industrial segment of the economy.
"The industry is a significant recipient of foreign direct investment, the largest originator of offshore debt capital, and the source of Australia's substantial cross-border banking claims," Thomas said.
The report found banking barriers between Australia and Asia-Pacific included the fractured nature of the banking sector in Asia-Pacific, regulation, overseas expansion risks, and justification for long-term offshore investments.
It was also noted that high barriers to financial services trade and cross-border investment in Asia may also be inhibiting Australian firms and investors from growing their connections with the region.
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