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week 10 financial market and regulation (Reserve Bank of Australia…
week 10
financial market and regulation
orgins& roles of central banks
aim: maintain a stable eco environment& effective payments system
function:
developing and implementing monetary policy
provding banking sevices for gov
issuing currency
overseeling the poerations of the financial system
facilitating the payments system
main role:regulate a nation's money supply&financial institutions
Australia's monetary Authorities
(role: split among three independent agencies)
the australia prudential regulation authority(APRA)
RESPONSIBLE:prudential supervision of financial institutions including banks,credit unions,building societies,insurance & superannuation companies
australia securities and investment commission(ASIC)
RESPONSIBLE: enforcement of company and financial services laws / licensing and monitoring financial markets and advisors as well as monitoring the disclosure and conduct of Australian companies and service providers
OBJECTIVES:protect customers investors and creditctors
Reserve bank of australia(RBA)
RESPONSIBLE: monetary policy,the payments system & the stability of the entire financial system
bank for international settlement
facilitator of central banking co-operation
accomplished by provding a meeting place and resource for meeting of central banks
international monerary authority based in Basel,Switzerland
acts as a bank to the central banks,provding sevices related to their fianancial operations
central banking in the US
around the world have the similar roles& functions with some variations,
US central system
central banking in China,Hong Kong,New Zealand
China
responsible: monetary policy ; currency regulation;developing policy for fianancial markets;facilitating interbank borrowings
operates alongside China's Bank Regulatory Commission,perform a role similar to APRA in Australia
Hong Kong
NO central bank
has principle regulator called Hong Kong Monetary Authoriry (HKMA) that performs many of the fuctions of a typical central bank
New zealand
similar to Australia, BUT no equivalent APRA in New Zealand -responsible for monetary policy, systemic stability and prudential regulations
Reserve Bank of Australia
structures: managed and overseen by the Reserve Bank Board:9 members including a governor and secretary of the department of treasury meet 11 times a year and its main business is monetary policy
accountability to parliament: produces an annual report for the treasurer/governor of RBA meets regularly with treasurer / RBA is not directly under the authority of the gov. -said to be independent of the gov.
functions: 1 determines and implements monetary policy;2 issues Australian Currency note; oversees the payments system;3 acts as the gov's banker;4 issues and provides the market for the Treasury securities;5 manages financial system liquidity and the gov's holding of foreign exchange
monetary policy: management of short-term interest rates/objectives of monetary policy: maintenance of a stable currency /full employment/ prosperity and welfare of the ppl. of Australia
medium-term objective: control inflation
payment system
used to settle millions of transactions each day
3 role: promotes the efficiency and stability of the payments system /provides the facilities for the settlement of transactions /acts as the banker to the Australian Gov