The global financial crisis that emerged in 2007 has turned into a major, worldwide economic downturn more serious than any since the Great Depression of the 1930s. The financial and economic crisis has seen considerable debate about its origins and consequences, as well as the responses of policymakers. The crisis raises important issues about the role of markets and governments in the allocation of capital and the regulation of financial institutions.

Australia went into the economic crisis better placed than most countries. However, as a small and open economy integrated into the world’s capital markets, Australia cannot expect to escape the financial and economic consequences. Australia faces many of the same issues confronting other countries.