Sydney's Strategic Time Zone
Sydney is the first international financial center to trade each day.
As such, its position in a strategic time zone that spans the closing of the U.S. markets and the openings in Europe is critical.
When the world's stock markets crashed in October 1987, Sydney took a bigger hit in percentage terms than any other international finance center.
Because of its position in the global time-zone net, Sydney was the first market to crash, and it took another direct hit the following day as other markets around the world plunged.
An International Focus
While it may be a negative association, the October crash nevertheless vividly illustrates that Sydney's occupation of its time zone is of crucial importance to international businesses with or without trading subsidiaries in the city.
Sydney not only opens first but also combines a life-style and environment that have become the envy of much of the rest of the world.
The Asia-Pacific region is the world's fastest-growing, and within it, Australia has the largest developed economy, after Japan's.
The state of New South Wales, of which Sydney is the capital, is the country's largest economically. It contributes 35% of Australian gross domestic product. Sydney is the banking and financial hub of Australia.
Open-Door Bank Policy
In the mid-1980s, federal Treasurer Paul Keating opened the doors to free-market banking practices by deregulating the marketplace and granting trading-bank licenses to 16 foreign banks.
The United States was quick to seize on this opportunity, and Bankers Trust, Citibank, and the Bank of America were among the new trading-bank licensees.
Of these, Citibank and Bankers Trust are recognized as leading performers among the foreign licensed banks.
In addition, the number of merchant banks has risen dramatically, to a total of 108, with assets of $35 billion, and more than 18 countries are now represented in Sydney's financial center.
With financial deregulation, which was based on Sydney's more than 160 years of banking experience, the domestic financial markets burgeoned, and Sydney boasts a range of financial services comparable to those offered in any other international financial center.
And because of its experience and liquidity, Sydney provides a full range of deep, active, and innovative markets essential for business, financial transactions, and risk management.
Built on solid foundations in the British banking system, Australia's financial markets date from 1817, when the Bank of New South Wales (now called Westpac Banking Corp.) opened for business in Sydney.
Australia's financial markets, which have not experienced a bank failure in the past 100 years, demonstrate an enviable record of stability, growth, and opportunity.
Reserve Bank's Influence
The Sydney-based Reserve Bank acts as the Australian central bank, influencing money and banking through its monetary policy.
Banking is still the dominant sector in the Australian finance industry, accounting for 65% of total financial-sector assets.
With consistent annual growth rates of 20%, trading-bank assets totaled $245 billion on January 1990.