Financial Institutions and Markets

1764 words 8 pages
Financial Institutions and Markets

2.1 Outline the roles of the various monetary authorities that regulate the Australian financial system. What is the role of Council of Financial Regulators?

In Australia, the role of monetary authorities is split between three independent statutory agencies with specific responsibilities in the Australian financial sector:

1. The Reserve Bank of Australia (RBA), Australia’s central bank, is responsible for monetary policy, systemic stability and the payments system;

2. The Australian Prudential Regulation Authority (APRA) is responsible for prudential supervision of financial institutions including banks, credit unions, building societies, and insurance and superannuation companies.

…show more content…
As a result the regulatory system in many regions of the world (particularly the US and UK) were/are subject to significant reviews.

In terms of Australia, there are a number of reasons why there was a lesser impact that other developed countries. These include:

• A small system characterised by a small number of large institutions that were well capitalised and more closely monitored • Minimal impact on underlying mortgage assets which placed less pressure on loan portfolios, largely due to under supply of housing and a growing population • An export led economy (in relation to minerals) that had only a comparatively short slow down period • Government action to guarantee deposits and stimulate the economy

2.7 Outline how the Australian payments system operates. Why is it important for this system to be efficient and reliable?

• The payments system is the mechanism by which the funds are transferred from one party to another to settle these transactions. The payments system is the mechanism that allows consumers, businesses and other financial market participants to transfer funds to one another to settle these transactions. An efficient and reliable payments system is therefore a key ingredient to maintaining a stable and effective financial system.

• The Australian payments system handles transactions in accordance with their size, ie whether they are


  • Family As A Social Institution Doc
    5581 words | 23 pages
  • Political-Cultural Approach to Market Institutions
    934 words | 4 pages
  • “the Rapid Expansion of International Financial Market Since Early 1980s Have Integrated the World Economy”. Discuss.
    1268 words | 6 pages
  • The Economics of Money, Banking, and Financial Markets
    1087 words | 5 pages
  • lending market and its aftermath reflec
    4730 words | 19 pages
  • Political Institutions
    1229 words | 5 pages
  • Critically Analyse How the Government Debt Problems Initially Faced by a Few Relatively Small Economies Could Trigger Such a Wide Impact in Financial Markets
    2389 words | 10 pages
  • Secondary Market
    1962 words | 8 pages
  • Social Institution of the Family
    2393 words | 10 pages
  • Journalistic and Commercial News Value: News Organizations as Patrons of an Institution and Market Actors
    9266 words | 38 pages