Financial system in Australia
From Wikipedia, the free encyclopedia
The Australian financial system has several distinct sectors:
- Banks, credit unions and building societies
- Insurance (life and general)
- Superannuation
- Financial markets—debt, equity and derivative markets
- Payments systems—cash, cheques, EFTPOS, RTGS and other high-value payment systems
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[edit] Banking
Banking in Australia is dominated by what are known as the "big four":
There are several smaller banks, and a system of credit unions throughout the country. Many large foreign banks have a presence, but few target the retail banking market. The central bank is the Reserve Bank of Australia (RBA). Australia is one of the few OECD countries not to have any explicit government guarantee or insurance of deposits held by banks, although in the past state and federal governments have provided financial assistance to failing banks.
[edit] History
Traditionally banks in Australia were identified as either trading banks, which dealt with businesses, and savings banks, whose business was mainly personal savings and home loans business. Many of these savings banks were owned by state governments.
As with many other countries, the great depression brought a string of bank failures. Two of the state-owned savings banks (of NSW and WA) would be bought out by the then federal owned Commonwealth Bank.
In 1961, central bank duties were transferred from the Commonwealth Bank to the newly created RBA, and the banking industry was slowly deregulated over the next two decades. The distinction between trading and savings banks was removed and banks were allowed to operate in the money market (traditionally the domain of merchant banks).
The boom and bust of the 1980s was another turbulent time for banks, with some establishing leading market positions, and others being absorbed by the larger banks. The 1990s saw the privatisation of the Commonwealth Bank, and increased competition from non-bank lenders, such as providers of securitised home loans.
[edit] Insurance
[edit] Superannuation
[edit] Financial markets
debt, equity and derivative markets
[edit] Payments systems
cash, cheques, EFTPOS, RTGS and other high-value payment systems
