Question

• Discuss what arrangements (such as ‘guidelines’, ‘regulations’ imposed by APRA or the RBA) are in place to ensure the banks perform these special functions for the benefit of the financial system as a whole.

Answer 1

The Wallis Committee has introduced 3 agencies for stability Australia's financial system on 1 July 1998, with specific responsibilities:

• Australian Prudential Regulation Authority (APRA) function to implement for prudential supervision;

The institution is responsible to monitor function of public deposit institutions (banks, insurance company etc).

The agency has right to revoke license in case of any fault

• Australian Securities and Investments Commission (ASIC), for consumer protection

Develop policy and laws for operation for customer protection

• Reserve Bank of Australia (RBA), for monetary policy

Provide license to bank , The RBA and ASIC signed MOU to promote transparency in March 2002.

The Bank should ensure the payments in in robust condition in safe mode.

The RBA headed by governor and form the Council of Financial Regulators (CFR).