Preview

Nbnvb

Powerful Essays
Open Document
Open Document
642 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Nbnvb
Maximum word length each: 150 words

1. Outline the role of residential mortgage securitization in the US subprime crisis. 2. How did ratings agencies contribute to the financial crisis? 3. Identify the trends in the sector balances in the Australian flow of funds since 1998. 4. What impact did the GFC have on the Australian financial services sector? 5. What is the role of the financial system and why is it important to the economy? 6. Explain what is meant by the term ‘financial intermediation’. 7. What would be the implications for investment in physical assets such as oil refineries or long-distance telephone cable if financial intermediaries were not willing to invest money for long periods? 8. What is the difference between primary and secondary markets? 9. Compare and contrast money and capital markets. 10. Outline the major risks faced by financial institutions. 11. What are some problems with direct financing that make indirect financing more attractive? 12. Explain the concept of financial intermediation. How does the possibility of financial intermediation increase the efficiency of the financial system? 13. Discuss the primary functions that the RBA performs in the Australian financial system and how these relate to achieving its overall responsibilities set out in its charter. 14. How is an increase in the cash rate likely to affect mortgage interest rates, imports, the exchange rate, and inflation? 15. Why is a repo like a secured loan? 16. List and describe three types of hybrid securities and the features they might have. 17. Define the following terms as they relate to secondary markets: depth, breadth, and resiliency. 18. What were the main causes of the financial crisis? 19. What are the major regulatory bodies in the Australian financial system and what are their main roles? 20. Outline the development of central banking in Australia from the CBA, formed in 1912, to the RBA as we know it today.

21. Explain the sense in which the RBA is

You May Also Find These Documents Helpful

  • Best Essays

    Mgmt901 Unit 1 Assignment

    • 2072 Words
    • 9 Pages

    Events such as the Global Financial Crisis (GFC) of 2009 and the more recent failing of European economies have shaken consumer confidence leading to conservative attitudes about money. ANZ identifies in particular factors such as low credit growth, funding challenges and new regulation. However they have indicated that these potential threats to the industry represent an opportunity for them provided that they can make structural changes that allow them to be leaner and more innovative (The Asian Banker, 17 February 2012). The article goes on to describes several changes to senior management, including the creation of a new CEO role to head up the new division of Global Wealth and Private, which are aimed directly at supporting the super regional strategy. Porter’s Five Forces Model Porter’s Five Forces allows managers to analyse the external environment by examining five major factors: the level of rivalry between organisations in an industry, the barriers to entry into an industry, the power of suppliers, the power of buyers, and the threat of substitute products (Waddell et al, 2011). By analysing an industry using this tool, managers can identify both opportunities and threats that exist in that industry. The banking industry in Australia is competitive, dominated by 4 large banks but also with quite a few smaller bank and non-bank organisations. Rivalry between the ‘big four’ is particularly intense. There is little in real terms to separate them in the eyes of the average consumer as any changes made by one in terms of interest rates, product offerings or services areis generally quickly matched by the other three. Each of the big four banks possesses such large resources and market share that this poses significant barriers to entry to the banking industry. Even so, there are many smaller but equally well established bank alternatives, such as…

    • 2072 Words
    • 9 Pages
    Best Essays
  • Powerful Essays

    * financial institutions within your chosen region. This paper will describe the degree to which the…

    • 7188 Words
    • 29 Pages
    Powerful Essays
  • Good Essays

    Vbnvbhnbnbvnvb

    • 1442 Words
    • 6 Pages

    4. The unequal sharing of electrons within a water molecule makes the water molecule _____.…

    • 1442 Words
    • 6 Pages
    Good Essays
  • Powerful Essays

    Nmbj

    • 615 Words
    • 3 Pages

    | |8/26 Lab |Safety Video, Lab Check-in |Exp. 2 Advanced study assignment (ASA2) | |…

    • 615 Words
    • 3 Pages
    Powerful Essays
  • Better Essays

    The latest recession has shown the world that no economy is stable. The global power house that is the United States was damaged so critically that it still has not completely recovered to this date. Other areas of the world such as Europe are still feeling the effects of the recession and their immense amount of debt has led the world to an unbalanced point. The Canadian economy was the least affected by this economic decline. A Comparison of mortgages and methods of diversification and concentration used in Canadian and U.S. banking systems helps one understand why the Canadian economy survived the recession, and ultimately why it is the superior banking system.…

    • 1492 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    Australian securitization as a source of funding for mortgage originators--who themselves are experiencing a reduction…

    • 17414 Words
    • 70 Pages
    Powerful Essays
  • Satisfactory Essays

    Com422

    • 3264 Words
    • 14 Pages

    Which of the following measures the difference between the private costs of regulations and the private benefits for the producers of financial services? a. Capital adequacy b. Agency costs c. Net regulatory burden d. Charter value e. Liquidity risk FIs are special because a. their failure can impose negative externalities on the economy. b. they receive special regulatory oversight. c. their business is the management of money. d. they provide a source of backup liquidity to nonfinancial firms. e. we are studying them. What is globalization? a. The process whereby FI focus more intensely on their own domestic market. b. Acceptance of the Federal Reserve as the regulator of the world financial system. c. Usually refers to the initiation of GLOBEX, a new international financial communications and trading system. d. The evolution of markets and institutions so that geographic boundaries do not restrict financial transactions. e. Joint ownership of international electronic payments systems. Negative externalities occur when a. the fear of FI insolvency leads to bank deposit runs. b. lending activity is curtailed. c. there are delays in disbursements from insolvent FIs. d. All of the above. e. A and B only. Identify the procedure by which a banker refuses to make loans to residents living inside given geographic boundaries. a. Credit allocation b. Redlining c. Intermediation d. Externalization e. Spinning Why is the failure of a large bank more detrimental to the economy than the failure of a large steel manufacturer? a. The bank failure usually leads to a government bailout. b. There are fewer…

    • 3264 Words
    • 14 Pages
    Satisfactory Essays
  • Powerful Essays

    Credit Unions In Australia

    • 1336 Words
    • 6 Pages

    Building societies were originally set up to pool small deposits from individuals and households in order to finance mortgage lending. Residential home ownership was highly desired by Australians and as it was difficult to obtain home finance from banks in the regulated environment, building societies were able to fill the breach and thrived. With deregulation of banks and the growth of the securitised mortgage market, the value of the intermediation function performed by building societies and credit unions (funnelling small savings into home mortgage lending or shorter term lending) was eroded by competition. Deregulation of the financial industry freed…

    • 1336 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    Developments in the Australian Financial Section Abstract This research report examines the structure of the Australian financial industry, its legal and regulatory framework and the current challenges faced by Australian banks. The report finds that the Australian financial sector has a comparatively strong regulatory structure; however, the effect of the Global Financial Crisis of the late 2000s has significantly lowered the growth rate the banks’ assets and posed other challenges to the banks. The report concludes that the collective challenges currently faced by Australian banks may, given the fragile global financial climate, combine to affect the profitability and overall stability of Australian banks if not properly addressed. This report is of the view that, in resolving these challenges, banks should fix their lending rates to reflect their cost of funding independent of the cash rate and adopt measures to improve efficiency in their management. Introduction The Australian financial sector is generally perceived as stable and well-regulated, and although it fared relatively well through the Financial Crises of the late-2000s, there has been noteworthy changes in its structure, regulation and the nature of threats facing its banks. This report explores the major challenges confronting Australian banks by analysing the causes and various perspectives on the issue. Firstly, the structure of Australian financial intuitions is analysed in terms of their asset size over a seven year period from December 2005 to December 2011. Secondly, the major laws and bodies governing the Australian financial industry are examined with particular focus on the liquidity and capital adequacy requirements of banks. Lastly, the report looks at the major challenges currently facing Australian banks which it identifies as: high cost of funding and exchange rate; lower credit and…

    • 2016 Words
    • 9 Pages
    Powerful Essays
  • Good Essays

    Because the majority of the voting public are also customers of one of the big four banks in Australia (Commonwealth, NAB, ANZ & Westpac), external political costs are often imposed on the banking industry. Because banks make such large profits, they are seen as "villains" by the public - providing a big target for politicians to aim at. PAT predicts that governments will act in a way to please the voting public so that they will stay in power. This article draws particular reference to the fact that it is an "election year" - this means that politicians make particular efforts to make sure that they are seen as bringing the "big bad banks" into line.…

    • 969 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Centuries have passed since ‘Investment Banking ' was first introduced to the world 's financial system. The fascination of making profit through newly created financial innovations, rather than basically depositing money in commercial banks in hope that the interest rate would not be reduced is truly a smokescreen.…

    • 2382 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    The recent crisis has been brought about by a lack of regulation in certain areas which I will address further on in this report. I feel that other areas were blamed for causing financial unrest and should be exempt from regulation which may be stringently imposed on them. I feel the next 5 years will be crucial in shaping the global economy for the next 20-30 years with regulation of the credit securities market essential. We all observed what occurred when deregulation occurred pre 2008 and I feel that in the credit securities market there are major aspects which need to be addressed. I will offer analysis on new legislation being signed in and conclude if this is in the best interests or not of the financial markets, I will also offer opinions on Credit Rating Agencies, Hedge funds and other regulation area which are of great importance to the financial markets and the global economy.…

    • 6781 Words
    • 28 Pages
    Powerful Essays
  • Best Essays

    The global financial crisis of 2007 transmitted shock waves worldwide urging international governments to prepare defensive measures to combat this economic turmoil. Hence, on 12th October 2008, the Australian and New Zealand governments introduced analogous schemes to guarantee liabilities issued by a wide range of financial institutions whereby prior to this phenomenon, neither nation had deposit insurance arrangements in place, a distinctive characteristic common in other developed nations.…

    • 3221 Words
    • 13 Pages
    Best Essays
  • Best Essays

    Fitzgibbons, A 2006, ‘The financial sector and deregulation in Australia: drivers of reform or reluctant followers?’, Accounting, Business & Financial History, vol. 16, no. 3, p. 371-387.…

    • 664 Words
    • 3 Pages
    Best Essays
  • Good Essays

    Negative Pledge

    • 1249 Words
    • 5 Pages

    Asset sales on the secondary loan markets, have become a more important part of the financial system over the last two decades. The big rise in activity initially arose as a result of the 1980’s sovereign debt crisis where banks sought to reduce their exposure to certain sovereign debts by selling on some of the loans. Then banks and certain other financial institutions then began through the 1990’s and 2000’s to utilise the secondary market more extensively to maximise the available profits1. The market was further developed by the development of securitisation (see Chapter 7), the entry into the market of non banking institutions, funds investing in loan products and the expansion of the leveraged buyout market in the corporate sector. Finally in various parts of the world organisations were set up to facilitate standard form documentation and operational procedures to make it easier to use the market. In the U.K. the Loan Markets Association (LMA)2, in the United States the Loan Syndication and Trading Association (LSTA)3 and in Asia the Asia Pacific Loan Markets Association (APLMA)4 all helped facilitate market activity in this way.…

    • 1249 Words
    • 5 Pages
    Good Essays