Part of the answer is that the rapid growth in financial activity is due to rising private sector wealth, as this also has been rising faster than GDP. Over the past decade, for example, household financial wealth has risen by about 170 per cent, compared with the 90 per cent increase in nominal GDP noted earlier.
A lot of this increase in wealth has found its way into the superannuation industry, where it is professionally managed across a wide range of markets, and this no doubt has contributed to financial market activity. But even this rapid growth in wealth still falls short of growth in financial activity. So I don’t think this is the complete answer.