At early stages of development, there may be a strong case for extensive public-sector involvement, where the private system is in its infancy. This was seen to be the case in Australia in earlier times. But as time goes by and the private sector becomes more vibrant, the benefits of extensive public-sector participation have to be weighed against the problems that it can bring.
One such problem is the potential conflict between being a participant in the commercial sector and a regulator of it. This was a feature of the RBA itself, which began life as a publicly owned commercial bank and then saw central banking functions grow in importance to the point where the two were separated in 1960.