Another important development was the abolition of capital controls and the floating of the Australian dollar. Prior to the 1980s, there were a range of constraints on capital flows that were intended to prevent or discourage firms from undertaking foreign borrowing. Since these controls were relaxed, banks and other corporations have obtained a significant proportion of funding from offshore bond markets.
Since 1986, the stock of bonds issued offshore by Australian residents has exceeded the size of the onshore market (Graph 10). Graph 10  The liberalisation of the capital account also contributed to the development of the “Kangaroo” bond market. Kangaroo issuance was also encouraged by, and contributed to, the development of an active cross-currency interest rate swap market in Australia.