RBA HSC Economic Essay
The RBA is Australia’s central bank
Its main roles are to conduct monetary policy and oversee the stability of the financial system
Controls a country’s money and banking system
Set up as a financial business with the desire to make profit and it does not deal with ordinary customers
Its primary purpose is the overall management of the financial system in accordance with the economic objectives of the Commonwealth Government
Created in 1959 under the Reserve Bank Act 1959
Prior to that, limited central banking operations were conducted by the Commonwealth Bank
Functions of RBA
Conducting monetary policy on behalf of the government:
Monetary policy is defined as Reserve Bank action designed to influence the cost and availability of money in the Australian economy through influencing the general level of interest rates
Reserve Bank conducts monetary policy with the aim of achieving a sustained low inflation rate while encouraging economic growth
System stability:
Reserve Bank’s traditional role of prudential supervision of banks is now the responsibility of the Australian Prudential Regulation Authority (APRA)
RBA retains traditional responsibility for the overall stability of the financial system
Provides guidelines to foster the stability of individual financial institutions, and these guidelines are enforced by the APRA
RBA also seeks to maintain long-term financial stability of the financial system by avoiding (or at least reducing the risk of) financial crisis
This protects deposits of members of public
Control of note issue:
Reserve Bank is the sole issuing authority for Australian currency
All Australian currency is manufactured by Note Printing Australia, which is a division of the RBA
Volume of notes and coins on issue at any particular time will vary according to the community’s demand for funds
RBA seeks to accommodate for different demands for cash at different times during the year
Regulation of payments system:
RBA is
Its main roles are to conduct monetary policy and oversee the stability of the financial system
Controls a country’s money and banking system
Set up as a financial business with the desire to make profit and it does not deal with ordinary customers
Its primary purpose is the overall management of the financial system in accordance with the economic objectives of the Commonwealth Government
Created in 1959 under the Reserve Bank Act 1959
Prior to that, limited central banking operations were conducted by the Commonwealth Bank
Functions of RBA
Conducting monetary policy on behalf of the government:
Monetary policy is defined as Reserve Bank action designed to influence the cost and availability of money in the Australian economy through influencing the general level of interest rates
Reserve Bank conducts monetary policy with the aim of achieving a sustained low inflation rate while encouraging economic growth
System stability:
Reserve Bank’s traditional role of prudential supervision of banks is now the responsibility of the Australian Prudential Regulation Authority (APRA)
RBA retains traditional responsibility for the overall stability of the financial system
Provides guidelines to foster the stability of individual financial institutions, and these guidelines are enforced by the APRA
RBA also seeks to maintain long-term financial stability of the financial system by avoiding (or at least reducing the risk of) financial crisis
This protects deposits of members of public
Control of note issue:
Reserve Bank is the sole issuing authority for Australian currency
All Australian currency is manufactured by Note Printing Australia, which is a division of the RBA
Volume of notes and coins on issue at any particular time will vary according to the community’s demand for funds
RBA seeks to accommodate for different demands for cash at different times during the year
Regulation of payments system:
RBA is