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Sydney has long been at the heart of Australia's financial services, with a history that dates back to 1817 when the first bank in Australia, the Bank of New South Wales, was chartered by Macquarie. This initial banking venture set the stage for a dynamic financial system that would undergo significant transformations. Although Sydney's early financial system was unstable, marked by frequent bank collapses, the financial landscape steadily evolved. A pivotal moment came in 1893, when the failure of 12 banks highlighted the need for a more robust system.
The Bank of New South Wales continues to operate today under the name Westpac, while the Commonwealth Bank of Australia, established in Sydney in 1911, played a significant role in the nation’s financial evolution by issuing banknotes backed by national resources. In 1959, the Reserve Bank of Australia, also headquartered in Sydney, replaced the Commonwealth Bank in this crucial function.
Sydney's financial services sector has grown to dominate Australia’s economy. By 2017, the sector accounted for 43% of the city's economic output, making Sydney the heart of the country's finance industry. The city has earned its position as a leading financial center in the Asia-Pacific region, promoted by successive Australian governments. In fact, Sydney ranked eighth in the 2017 Global Financial Centres Index, cementing its reputation as one of the most competitive financial centers in the world.
The expansion of foreign banking institutions in Sydney has been a key component of this growth. In 1985, the Australian Federal Government granted 16 banking licenses to foreign banks, and today, 40 of the 43 foreign banks operating in Australia are based in the city. These include global giants such as the People's Bank of China, Bank of America, Citigroup, and Deutsche Bank, among others.
Beyond its financial prowess, Sydney’s manufacturing sector has also contributed significantly to its economic growth, though it has seen a decline in recent decades. Manufacturing accounted for 39% of employment in 1961, but by 2011, this figure had dropped to 8.5%. Despite this, Sydney has remained Australia's largest manufacturing center, surpassing Melbourne in the 2010s with a manufacturing output of $21.7 billion in 2013. Key areas of resilience include high-tech manufacturing and a strong focus on the domestic market, which helped Sydney weather the challenges posed by a strong Australian dollar in the early 2010s.
At the heart of Sydney’s manufacturing sector is the Smithfield-Wetherill Park Industrial Estate in Western Sydney, the largest industrial estate in the Southern Hemisphere. This estate serves as a critical hub for manufacturing and distribution, bolstering Sydney's role as a leading player in both finance and manufacturing on the global stage.