Financial services' industry associations yesterday provided a preview of the positions they will push at the forthcoming financial system Inquiry. Former CBA chief executive and Future Fund chairman David Murray will lead the Inquiry.On Wednesday night, Treasury released draft terms of reference for the Inquiry. These include questions about how Australia will fund its growth and about domestic and international competitiveness, as well as the cost and quality of financial products.The Inquiry will look at the question of whether the regulatory system has the right balance between the competing demands of stability and innovation, and between consumer protection and efficiency. The role of new technologies and the developments in the payments system will also be canvassed.Controversy over the terms of reference centres on favoured topics not being explicitly mentioned, rather than the content of what Treasury has prepared.The Customer Owned Banking Association aired a long running gripe."While 'systemic risk' is covered, there is no explicit reference to the massive hidden subsidy the Big Four banks receive in the form of an implicit government guarantee," Louise Petschler, chief executive of COBA, said."This is a fundamental issue. The unfair funding cost advantage enjoyed by the Big Four banks, if left unchecked, will lead to greater concentration and [cause] more harm to competition, consumer choice and innovation."Other long-standing irritants that mutual ADIs want addressed include the "culture of regulators and its impact on competition, consumer choice and diversity of business models; the problem of major banks posing as regional banks or non-banks by using sub-brands; more effective disclosure about 'shadow banking' institutions and the proposed Financial Stability Fund levy."Steven Mu?nchenberg, chief executive of the Australian Bankers Association, pushed a couple of themes: "ensuring regulatory barriers don't impede innovation driven by customers' ever-changing needs"; and "ensuring there's a level regulatory playing field for all banks."In a forewarning of one tussle, Mu?nchenberg also said: "Protecting stability continues to be important, but we'll need to balance stability with competition, innovation and our capacity to deliver affordable banking services to all Australians."The inquiry's head, David Murray, told The Australian Financial Review that he was the right man for the job.Murray said: "Given that this is a broad review, where all the parts are interdependent, do you want someone who doesn't understand it? I've covered banking, aspects of investment banking, asset management, superannuation, general insurance, life insurance and retail, wholesale and international banking."