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Australian banks face challenges from new competitors and are investing in new technology to meet this challenge. There are 16 domestic banks in Australia, the biggest being the National Australia Bank (NAB). Australian banks face resistance when they close down branches, but they have lower productivity levels than US banks due to the high number of branches. The Australian government elected in Mar 1996 has set up a review of the country's financial system which will affect the future of Australian banks.

The resignation of John Bannon, the highly respected Labor premier of South Australia, in the wake of a financial scandal, in Sep 1992, has dealt a severe blow to the re-election prospects of the federal Labor government. Bannon is the fifth Labor premier to resign over financial mishandling charges. His resignation is likely to increase the public's discontentment with Prime Minister Paul Keating, whose credibility has already been effected due to the irresponsible conduct of his colleagues and his inept handling of economic matters.