GFC reforms need overhaul, say experts "The financial system took a great knockand we've panel beaten it a little bit... but it may stay out of shape": Professor Ian Harper. Photo: Regi Varghese The host of reforms rolled out in the wake of the global financial crisis should be raked over and assessed by the Abbott government's upcoming "son of Wallis" inquiry, experts say, to ensure they are working as intended. Kevin Davis, research director of the Australian Centre for Financial Studies,said one of the inquiry's priorities should be a stocktake of new regulation introduced in recent years to stem problems exposed by the global financial crisis. Speaking in the lead-up to Sunday's five-year anniversary of the collapse of Lehman Brothers - to be marked by a special BusinessDay package tomorrow - Professor Davis said the former government's move to guarantee bank deposits through its financial claims scheme, its sweeping reforms to financial advice and offshore measures like the Basel III bank liquidity requirements should all be examined. Five years ago on Sunday, investment bank Lehman Brothers - weighed down by its catastrophic exposure to the US sub-prime mortgage market - filed for bankruptcy, an event that sparked financial panic around the world. Ian Harper, a member of the 1997 Wallis review, said the major changes that had swept through global markets over the five years since meant the time was right to reassess whether Australia's economy was being served by the financial system. He also listed as priorities the introduction of government guarantees for bank deposits and tougher capital rules for banks, as well as growing concentration among the big four lenders. "The relevant question for us I think is: Is the Australian financial system now and into the prospective future still calibrated in a way which will serve the needs of the Australian economy?" said Professor Harper, a partner at Deloitte Access Economics. The financial system took a great knock in the side and we've panel beaten it a little bit... but it may stay out of shape, or this is the new shape of the financial system we have to work with and ask ourselves OK fine is it still going to do its job? A new "root and branch" financial system inquiry - a concept turned down by the former Labor government despite having Treasury's backing - was a key promise by Treasurer-elect Joe Hockey, who has described it as a Son of Wallis, or Grandaughter of Campbell" in reference to the landmark 1997 and 1981 reviews which helped shape Australia's financial system and regulation. He has pledged to release the terms of reference for the inquiry - which he has said would "set down a new road map for the development and maintenance of a globally competitive financial system" - within 100 days of taking office. Professor Harper has been among those mooted as potential heads of the inquiry. Professor Davis, also a professor of finance at Melbourne University, said the explosion in online banking and commerce since 1997 - "internet banking was not even a glow in the eye of the Wallis inquiry" - meant the future role of technology would be "fundamental" to the inquiry. But he said the inquiry should also have a strong focus on issues and trends that had been neglected due to the financial crisis, such as the long-term implications of the flow of Australians' savings into superannuation, the funding of infrastructure and how the financial system would cope with demographic change. He said Australia had been so pre-occupied with the GFC fallout that some crucial issues had been "missed." "What can governments do in terms of design of the financial sector to safely drive it and make it adaptable to things like structural economic changes, economic shock, demographic changes," he said.