Growth in productivity in the financial sector slackened over the 2000s, dropping to less than half the level of the 1990s, according to research by the Grattan Institute published yesterday by the Reserve Bank of Australia.Saul Eslake, program director at the Grattan Institute, estimated that the average annual rate of productivity growth in financial intermediation was 1.7 per cent in the years from 2000 to 2007.In contrast, he estimated that annual growth in productivity in financial intermediation in the decade from 1990 to 2000 was 3.8 per cent.For the whole of the Australian economy, Eslake estimated productivity growth to be 1.2 per cent a year on average in the period 2000 to 2007- down from an annual average of 2.2 per cent in the decade to 2000.The paper reprised analysis first published by the Grattan Institute in February that puts the gross value added per hour worked in financial and insurance services in Australia at around A$170, or roughly three times the average gross value added per hour worked for all industries in Australia. Only mining, with a gross value added per hour worked of around $290, was more productive than financial services according to this analysis. Eslake puts the chief cause of the slowdown in economy-wide productivity down to the flagging of policy reform. The paper does not address sectoral-specific explanations in most industries, including finance.Eslake presented his paper at an annual RBA economics conference in Sydney, which this year reviewed aspects of Australia's economic history over the last decade.