For this reason, credit union deposits were not factored into the initial competitive screens at all under the 1995 Bank Merger Guidelines. However, in the past few decades, we’ve seen credit unions expand their fields of membership. Many credit unions now go well beyond the traditional “common bond” requirements for membership and increasingly allow membership based on geography.
Indeed, the development of deep and liquid hedging markets is one of the reasons why Australia’s experience with capital account liberalisation and exchange rate flexibility has worked out well. When we first moved from a fixed, to a managed, to a floating exchange rate regime in the 1970s and 1980s, these markets were not particularly well developed, but they have since matured significantly.