Banking System Competition and the Macro-economy

Australia has one of the most concentrated banking sectors in the world, generating concerns regarding itsefficiency. This project aims to develop unified frameworks to understand and evaluate quantitatively how thestructure of the banking industry affects the macroeconomy and provide policy recommendations for establishinga healthy, efficient banking industry. This project expects to improve understanding of the welfare trade-offbetween bank competition and economic well-being to enable policymakers to better determine the optimalconcentration of banking sector in Australia. This will enhance the productivity and international competitivenessof Australias financial system and the broader economy.