What was one of the changes that deregulation involved regarding foreign banks?

Deregulation in the banking sector typically aimed to increase competition and enhance market efficiency. One significant change that occurred regarding foreign banks was the encouragement of their entry into the Australian market. This was motivated by a desire to foster a more competitive environment, which would benefit consumers through better services and potentially lower prices.

By allowing foreign banks to enter, Australia aimed to tap into the benefits that come from increased competition, such as innovation and improved financial products being offered to consumers. This shift also aligned with the global trend of financial integration, where countries sought to open their markets to attract foreign investment and expertise in banking.

The other options do not align with the overarching goals of deregulation. Prohibiting foreign banks would create barriers to entry, which contradicts the philosophy behind deregulation. Direct government control over foreign banks would be contrary to the independence that deregulation sought to promote. Lastly, limiting operations would again restrict the potential benefits associated with a more competitive market created by allowing greater foreign banking presence.