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Regulation of Financial Markets – The Reserve Bank of Australia

Regulation of Financial Markets – The Reserve Bank of Australia. Facts. Australia's central bank The role of controlling the countries money and banking system The RBA was created in 1959 under the Reserve Bank Act 1959

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Regulation of Financial Markets – The Reserve Bank of Australia

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  1. Regulation of Financial Markets – The Reserve Bank of Australia

  2. Facts • Australia's central bank • The role of controlling the countries money and banking system • The RBA was created in 1959 under the Reserve Bank Act 1959 • Its purpose isn't to make a profit like other banks, rather its purpose is to manage the economic systems.

  3. RBA Objectives • To maintain the stability of Australia’s currency • To maintain unemployment • To maintain economic prosperity and welfare of people in Australia • In recent years, its highest priority was to sustain low inflation

  4. The Function of the RBA

  5. Conducting Monetary Policy • It is one of most important roles • Effects the availability of money in the economy by influencing the interest rate • The main achievement is to have low inflation whilst encouraging economic growth

  6. Systemic Stability • The RBA is responsible for the overall stability of the financial system. • The RBA provides guidelines to ensure the stability of individual financial institutions, which are enforced by APRA • The RBA seeks long term financial stability by avoiding financial crisis by providing guarantees for the depositors funds

  7. Control of Note Issue • The Reserve bank is the only one issuing note in Australia. • All Australian currency is manufactured by Note printing Australia, which is part of the RBA • The volume of notes and coins on issue are according to the community’s demand for funds.

  8. Regulation of the Payments System • The RBA is responsible for the payments system. • It is ensuring the efficiency and stability of payment methods (eg. Credit cards, cheques, electronic cash) • This function is carried out by the Payments Systems Board within the RBA.

  9. Banker to Banks • banks hole exchange settlement accounts with RBA. It used for banks to settle debts between themselves, as well as end of each day's trading. • For banks to buy and sell government securities

  10. Responsibility for Holding Australia’s Reserves of Gold and Foreign Currency Dealings • The RBA provides funds that are used for international payments • The RBA also oversees the dealers in the foreign exchange markets

  11. Banker and Source of financial and Economic advice to Governments • The RBA is a banker and financial agency for the Commonwealth Government and the state governments • Since 1999 the RBA has been in competition with other financial institutions to provide services to the government • The RBA publishes assessments of the economy and the financial markets which have significant effect on policy making

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