savings banks were required to invest in government debt. as this was gradually reduced from 70 per cent to 40 per cent between 1963 and 1978, savings banks could correspondingly increase the share of housing lending in their assets. on the pricing front, the interest rate ceiling on large housing loans was removed in the early 1970s and then in april 1986, the interest rate ceiling on all new housing loans, 13½ per cent at the time, was removed. ( existing loans remained subject to the 13½ per cent cap until they were discharged. ) in terms of the structure of the market, the distinction between savings banks and trading banks was removed in 1989. prior to that, in the mid 1980s, 15 foreign banks were given licences to operate in the australian market. however, the foreign banks, in the main, focussed on lending to businesses rather than lending to households, in large part because they did not have a branch network which would enable them to compete effectively against the local banks. further financial innovation which would have facilitated their ability to compete without a branch network was still nearly a decade away. the major change in market structure was that a number of building societies and credit unions converted to banks through the 1980s and early 1990s. becoming a bank allowed these institutions a greater capacity to expand their capital base. more generally, in the first few years after deregulation, business lending grew much more quickly than housing lending. between january 1985 and december 1988 business lending grew at an average annual pace of 30 per cent, while housing lending grew by 22 per cent. 2 as a result, the share of business loans in banks ’ total lending rose from 54 per cent to 62 per cent over this period. these are nominal growth rates. inflation during this period averaged 8 per cent. however, in the early 1990s, a number of factors contributed to the banking system shifting its focus from lending to business towards housing : first, the banks suffered large losses on their business loan portfolios during the early 1990s recession. in contrast, the losses on their housing loans were relatively mild, notwithstanding the fact that the unemployment rate rose to about 11 per cent and mortgage rates reached as high as 17 per cent. second, demand for credit from the corporate sector declined as the sector underwent a period of deleveraging. third, the introduction of the ( first ) basel capital accord saw a change in the risk weighting in favour of housing assets. in august 1988, the reserve bank of australia ( which was then the banking sector regulator

a mining boom explain low wages growth in some other advanced economies. another part of the story, particularly overseas, is slower productivity growth. in the united states, for example, low growth in wages is being matched with low productivity growth. in australia, productivity https : / / www. rba. gov. au / speeches / 2017 / sp - gov - 2017 - 07 - 26. html 9 / 13 7 / 26 / 2017 the labour market and monetary policy | speeches | rba growth has also slowed somewhat. here, however, the slowing in earnings growth has been more pronounced than that in productivity. the result has been a decline in labour's share of national income. none of these reasons alone appears sufficient to explain the weakness in wage growth. this suggests that there is something else going on, and that it has a global dimension. many workers in advanced economies feel like they face more competition. a basic principle of economics is that when you face more competition, you are less inclined to put your price, or as a worker, your wage, up. this perception of greater competition is coming from two sources. the first is globalisation. one of the positives of globalisation is that it increases the size of market that a firm can tap. at the same time, though, globalisation increases the number of competitors that can tap your market ; it increases competition. the second source is changes in technology. in some industries, advances in technology have led workers to worry about the competition from robots. at the same time, advances in technology have made more areas of the economy subject to international competition ; there are fewer truly nontraded industries any more. perhaps as a consequence of this extra competition – or perhaps as a consequence of other forces within our societies – many workers in advanced economies feel that the world is less secure – less secure economically and less secure politically. this means that security is valued more highly. with a greater premium on security, it's plausible that workers are less inclined to take a risk by seeking larger wage increases. one related aspect of the current labour market is a decline in job mobility. data published by the abs suggest that the share of employed people changing employers is around the lowest in recent decades ( graph 9 ). it is likely that in an environment of less job security, fewer people are inclined to switch employers. there is also a demand - side effect, with fewer firms attempting to attract workers from other firms. this is consistent with subdued wage growth.