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deposit growth; mounting political and public pressure to cut interest rates on loans; and
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…
Reserve Bank’s traditional role of prudential supervision of banks is now the responsibility of the Australian Prudential Regulation Authority (APRA)…
References: Andrew Bailey (2013) “The future of UK banking - challenges ahead for promoting a stable sector”. Bank of England [online]. Available from:…
Australia’s banking system is changed to a variety of measures to promote competition (Treasury, 2013). Reforms such as prohibition of mortgaged fees for home loans; this will encourage the people to avail bank loans. Credit card reforms were also made by the Australian Government to make it easier to credit cardholders to move their financial account to other financial institution. The impact of such is to will stimulate the people to invest. Depending on the situation of the country other policies such regulation of interest rates, prime lending rate and bank market operations are also influenced by the government. Having a control on this financial institution will put the Government in a better position to improve Australia’s…
In our mixed economy, there is a need for regulation and intervention on interest rates and the general level of economic activity. Australia’s current healthy economy has been developed partly through the functions of the Reserve Bank of Australia (RBA). Their functions include; conducting monetary policy, acting as a banker to the government, settling transactions between banks, and ensuring financial stability.…
Like all other economies the Australian economy was very much affected by the global economic crisis and the recession around the world therefore the financial institutions started to feel the pressure and the stress of the situation but the Australian Government put in place measures to guarantee the debts of banks.…
This business report aims to investigate the market share held by the 4 major banks in the Australian banking industry, and the competition that exists within the banking industry.…
Extensive research has determined that the banking industry is in an unstable state. The industry’s profits have declined over the last few years mainly as a result of bad debt resulting from the US subprime issues as well as the recent global economic downturn. With many competitors, competition has increased in recent years to attract younger customers who historically have less loyalty towards banks.…
The Global Financial Crisis (GFC) was followed by the deepest recession in the world economy since World War II. The Australian economy performed better during this period than most other advanced economies on nearly all relevant indicators. Although financial and economic conditions were stressed, the financial system worked remarkably well (Tony & Morling, 2011). Diverse factors have been stood in to explain this strong Australian economy performance during this recession. These include the strength of Australian financial system, the monetary and fiscal policy response and the Australian government commission’s well performing. This paper looks at only Australian Securities and Investment Commission (ASIC) performance…
Deregulation, innovation and globalisation has changed the way banks run from asset management to liability management, as well as the change from ‘mono’ to ‘multi-tasking’ and the increased competition in the sector as well as risk. The banking system has evolved drastically from the traditional mono-tasking institution to what it is now. This change in roles of asset and liability management could be one of the main reasons behind the global financial crisis of which the aftermath effects are still being felt. In this essay I will analyse these three trends in turn and so to explain the reasons for the change to liability management.…
After so much worldwide financial turmoil, learning the right lessons from the global banking crisis is a challenge for the advanced economies and the larger emerging economies whose policies will determine the global financial system over the next several years. The most difficult challenge is not only learning, but applying the lessons learned from the crisis, which proves to be very difficult for all the affected nations and their people whom must live with the consequences. There are various lessons that were learned from the chaotic and disastrous global banking crisis. One of the first lessons that banks discovered is that they must establish an effective governance structure which includes policies dealing with credit risk and specifically with risk tolerance levels. This goes hand in hand with the fact that it is clearly realized from this crisis that credit rating agencies need to reclassify their models used to evaluate cryptic credit risk created in both Mortgage-Backed Securities (MBS) and Collateralized Debt Obligations (CDOs). (Eun & Resnick) Furthermore, the banking crisis has taught borrowers that they must be cautious of placing their faith in its entirety on credit ratings and therefore must question any discrepancies ahead of time. Another insight that was derived from the crisis is the fact that banks must work and build on credit analyses from the bottom up. Banks must ensure that they will be able to resist a severe market hence their liquidity positions, credit reserves and capital bases must be verified. The global banking crisis has also taught us that bankers do not examine credit risk as strictly when they are only acting as mortgage originators and then pass it on to MBS investors instead of holding it themselves. (Eun & Resnick) Bankers seem…
3) What is the name for the shifting of non-strategic functions to specialist firms to reduce costs?…
1) Mary Sue is the newly appointed CEO of a company that manufactures CD drives on an assembly line. Her staff has told her that the output the firm produces, given the number of workers employed, indicates that some workers may be shirking. According to efficiency wage theory, what should she do?…
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.…
STANDARD CHARTERED BANK A STRENGTHS-BASED APPROACH TO HRM GROUP-E NAME MD SHAIKAT HOSSAIN MOHAMMED MEHDI HASSAN KHAN NASREEN MUSTARY LAILA NUSRAT AMAN NAFISA FERDOWS AZAD ID 14-97417-1 14-97418-1 14-97458-1 14-97710-1 14-97695-1 INTRODUCTIO N Standard Chartered is the world's leading promising markets bank. It is headquarter situated in London. Its businesses though, have always been overwhelmingly international.…