Abstract
This chapter focuses on the Australian and New Zealand (NZ) banking industry. Australian and New Zealand banks have experienced growth as well as challenges over the past decade. They have weathered global financial turmoil, the COVID-19 pandemic and rapid increases in interest rates and still recorded solid profits and minimal losses, while some banks in a few other developed countries have struggled and/or collapsed. To understand why this might be, we examine the composition of the closely integrated banking sectors in Australia and NZ, their respective performance, regulatory capital positions, and some revealing findings from the Royal Banking Commission which led to regulatory reforms and recent developments that have shaped the Australian banking system and enhanced market competition. This chapter also considers sectoral developments over the past decade, including the COVID-19 pandemic and recent bank failures in the US and Europe.