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This study guide provides a comprehensive overview of the australian banking industry, covering its historical development, key players, financial markets, and economic concepts. It includes questions and answers related to the australian prudential regulation authority (apra), the reserve bank of australia (rba), financial intermediation, investment banking, and wealth management products. The guide is particularly useful for students studying finance, economics, or business.
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Which regulator makes and enforces rules which govern the capital adequacy of Australian Banks? - ✔✔The Australian Prudential Regulation Authority - APRA What events occurred in the Banking Industry in 1800s and early 1900s? - ✔✔First Bank in Australia was Bank of NSW, Established in 1817 Sydney. Discovery of gold in 1851 led to minting of Australia's own gold coins spurring development of Banking. Boom in Australian property market in 1800s led to Banking crisis in 1893. What events occurred in 1910-1920 in the Banking Industry? - ✔✔Australian pound was issues as the Legal tender in Australia and the Australian Notes act 1910 assigned responsibility for the issue of Bank notes to the Commonwealth Treasury. What events occurred in 1911 - 1913 in the Banking Industry? - ✔✔Federal government established the Commonwealth Bank, which by 1913 had branches in 6 states. What events occurred in 1920 in the Banking Industry? - ✔✔Commonwealth performed some central Bank functions, which greatly expanded in World War II. What events occurred in 1930 - 1931 in the Banking Industry? - ✔✔ 1931 - The Great Depression, By the end Banking Industry became tightly regulated. Banks classified as either savings or trading Banks. What events occurred in 1990 - 2000 in the Banking Industry? - ✔✔14/01/1960 - Reserve Bank of Australia was created 1969 - Rolled out ATMs, and early 1970 BSB identifier was introduced. What events occurred in 2000 - 2017 in the Banking Industry? - ✔✔Renewed emphasis on corporate governance, values, ethics. Jan 17 - Better Banking program launched with initiatives:
What events occurred in 1980's in the Banking Industry? - ✔✔Government adopted the four pillars policy. Announced it would reject any mergers between the Big 4 Banks.
What is Mergers and Acquisitions? - ✔✔Where a company is looking to buy another company, investment banks offer advice on how the company should proceed with the acquisition, including the pricing of the offer. What is a Key Risk for Investment Bankers? - ✔✔Conflicts of interest - can occur when investment bankers, who have access to confidential information from clients related to their business and prospects, can pass information to their firm's traders. Investment banks need to establish barriers known as 'Chinese walls', or information barriers, within the organisation to prevent exchanges or communication that could lead to conflicts of interest. What are the main differences between commercial banking and investment banking? - ✔✔Commercial banks tend to serve clients ranging from individuals, small to medium size businesses up to large corporate clients, other financial institutions, public agencies and governments. Investment banks tend to serve a diversified client base which can include corporations, financial institutions, governments and, in some cases, high net worth individuals. How do Banks source their funds? - ✔✔Accepting Deposits: Fixed term deposits (Lump sum deposited for Specific period Current Deposits (Business Accounts) Saving Deposits (From salary and wag earners) What are the type of Bank Loans and Advances? - ✔✔Overdraft Credit Card Short Term Loan - 12 months Medium Term Loan - 5yrs Loan Term Loan - 30yrs Bills of exchange and promissory notes Equipment leasing and hire purchase Trade Finance
Who are the Key Risk Indicators managed by and why? - ✔✔The risk committee will escalate risk matters triggered by the Key Risk indicators to the Board. The Board will specify the indicators to be monitored, and they will decide at which point the Bank is comfortable to operate. What is the Key Information required in the Risk Register? - ✔✔1. Name of the project/business unit/division
What are the Basel Committee on Banking supervisions obligations introduced in BASEL II 2007? - ✔✔Establish a global risk management framework. Three pillars covering:
What is a partnership? - ✔✔A business structure that involves a number of people who operate the business together. Individuals must be registered for GST if make over $75k + What is a company? - ✔✔A separate legal entity. This means the company has the naming rights as a natural person and can incur debt, sue and be sued. Owners can limit their personal liability and are generally not liable for company debts. Must be registered for GST if make over $75k + / not-for-profit - 150K+ What is a trust? - ✔✔An arrangement where a person or a company (the trustee) holds assets (trust property) in trust for the benefit of others (the beneficiaries). What are the 4 topics Corporate Governance typically concerned with? - ✔✔1. Effectiveness and Efficiency of a company's operations.
What is the RBA's role in Payments and Infrastructure? - ✔✔RBA ACTS AS:
Reserve Bank Act 1959 - What are the two boards? - ✔✔1. Reserve Bank Board