example, garber ( 1990 ) ). the rationale for any one participant in pushing the price further away from its fundamental equilibrium was often along the lines of the “ greater fool ” presumption – however artificially high the price, someone would pay more for it later. so the first stage of the debate, following the crisis, had an almost surrealistic air about it, with the imf pressing at its annual meeting in hong kong at the end of 1997 to add capital account deregulation to its mandate, at the very moment when the excessive inflows and reversals had been shown to be so damaging. the wider debate on globalisation is, of course, very relevant. one recent contribution ( friedman 1999 ) provides useful terminology. he talks of the “ electronic herd ” – the anonymous fund managers behind their screens – and sees the proper response for emerging markets being to don the “ golden straitjacket ” – whose specifications are a predominantly private - sector economy, balanced budgets, low tariffs, and open capital markets, including unrestricted foreign investment. this sounds very much like the “ washington consensus ”, and as a framework of reference it makes good sense, particularly if it accepts the feasibility ( and indeed the desirability ) of some adaptation to the local environment, and acknowledges that there is more to a successful society than an identikit market economy. friedman acknowledges complexities and subtleties – indeed, his title ( the lexus and the olive tree ) emphasises the need to balance technology with tradition. and he does not confuse inevitability with desirability, as the triumphalists do. but two aspects – the inevitability of the process and whether the end - point is the pure free - market model – require further comment. some powerful forces clearly do encompass the globe in an irresistible way – some reflecting superior technology ; some reflecting the need for a common standard ; and some, the greater world integration through the communications revolution. there are plenty of examples of “ winner takes all ” – a dominant player or technology. but there are just as many examples of persistent national characteristics and behaviours. to imply that the whole package of essentially - us systems and values has to be accepted holus - bolus over - simplifies the forces at work. perhaps just as important, it would be a mistake to see these forces of globalisation attaching themselves uniquely to a textbook competitive free - market model. 4 many aspects of globalisation are

and lenders. with non - government bonds on issue now totalling about $ 66 billion, this market is now about as large as the market for commonwealth government securities. this development is beginning to produce a “ credit curve ” in australia. now that bond yields in australia have moved lower on the back of low inflation in recent years, the incremental pick - up for taking credit risk probably looks more attractive to investors than it might have a decade ago when bond yields were perennially double - digit numbers. the financial infrastructure in australia has evolved to accommodate this growth of financial activity. practitioners and the authorities have worked together to ensure that the “ plumbing ” kept pace with the system it was serving. in the case of payments and settlements systems, austraclear and the reserve bank ’ s rits system, which introduced delivery - versus - payment, and then the asx ’ s chess system for equities were important steps forward. our systems meet the highest international standards, as specified by the group of 30. they have been inter - linked through the rtgs system to provide a very efficient payments and settlements infrastructure. australia ’ s rtgs system is among the most advanced in the world because of the way it closely links to securities settlements, giving it a very high coverage of high - value transactions. we have already witnessed a major reorganisation of our financial regulatory agencies with the formation of apra and changing responsibilities for the rba and asic. the reform process is, of course, ongoing. the main item on the agenda at present is the so - called clerp initiative - corporate law economic reform program - which aims to achieve best practice in fields such as accounting standards, disclosure, corporate governance, and takeover law. it also aims to facilitate the application of technology to the conduct of business and promote competition in financial markets, including in investment products. the expansion of financial activity in australia has not been confined to market trading. holdings of financial assets in general have expanded rapidly. in the early 1980s, holdings of financial assets were about the same size as gdp ; these days, they are about 2 1 / 2 times the size of the economy. the development of financial markets and the financial system has not benefited only the “ big end of town ” - if anything, the system has become more “ democratic ”. one measure of this is the spread of ownership of equity, with share ownership by individuals increasing sharply in australia in the 1990s. the australian stock exchange estimates that 54 % of