RESERVE BANK of AUSTRALIA ANNUAL REPORT 2015 | INDEPENDENT AUDITOR’S REPORT 161 162 RESERVE BANK of AUSTRALIA Part 5: Indexes

Total Page:16

File Type:pdf, Size:1020Kb

RESERVE BANK of AUSTRALIA ANNUAL REPORT 2015 | INDEPENDENT AUDITOR’S REPORT 161 162 RESERVE BANK of AUSTRALIA Part 5: Indexes RESERVE BANK OF AUSTRALIA 2015 ANNUAL REPORT ANNUAL REPORT 2015 | CONTACT DETAILS 171 Reserve Bank of Australia Annual Report 2015 Contents Governor’s Foreword 1 Part 1: About the Reserve Bank Our Charter, Core Functions and Values 5 Governance of the Reserve Bank 7 Reserve Bank Board 12 Accountability and Communication 20 Organisation Structure 28 Part 2: Our Operations in 2014/15 Operations in Financial Markets 37 Banking and Payment Services 47 Banknotes 53 International Financial Cooperation 62 Community Engagement 73 Part 3: Management and Accountability Our People 85 Management of the Reserve Bank 90 Risk Management 96 Earnings and Distribution 104 Pro Forma Business Accounts 109 Statutory Reporting Requirements 110 Part 4: Financial Statements Statement of Assurance 117 Financial Statements 118 Notes to the Financial Statements 123 Independent Auditor’s Report 160 Part 5: Indexes Statutory Reporting Requirements Index 165 List of Tables 167 List of Graphs 168 Abbreviations 169 Contact Details 171 This report is available electronically in PDF and HTML formats on the Reserve Bank’s website: www.rba.gov.au/publications/annual-reports/rba/index.html. The Reserve Bank welcomes comments on this report. Feedback and enquiries about any aspects of this report may be directed to: Information Department Reserve Bank of Australia 65 Martin Place Sydney NSW 2000 GPO Box 3947 Sydney NSW 2001 Telephone: +61 2 9551 9830 Facsimile: +61 2 9551 8033 Email: [email protected] © Reserve Bank of Australia 2015. All rights reserved. The contents of this publication shall not be reproduced, sold or distributed without the written prior consent of the Reserve Bank of Australia. Annual reports are available on the Reserve Bank’s website, www.rba.gov.au. Some graphs in this report were generated using Mathematica. ISSN 1448-5303 (Print) ISSN 1448-5192 (Online) Governor’s Foreword International developments were again a source These were absorbed without widespread spillovers, of concern and uncertainty in 2014/15. The global though it is apparent that financial markets have economy recorded growth, but fell a little short of less underlying liquidity than was the case in earlier forecasts from a year earlier. Financial conditions periods. Over the year ahead, there will, no doubt, continued to be remarkably accommodative, as be further news for markets to absorb – not least major jurisdictions ran extraordinary monetary the approach of higher US interest rates. policy settings in an effort to support demand in The Australian economy recorded moderate their respective economies. Short-term interest growth in 2014/15. As in the world economy as a rates remained at or near zero and, in some whole, the growth was a little disappointing, leaving countries, rates on deposits at the central bank fell unemployment relatively unchanged at a higher- into negative territory. Long-term interest rates early than-desirable rate. Inflation remained low and, in 2015 reached the lowest levels ever recorded abstracting from the temporary effects of falling and in some European countries were negative energy prices, was consistent with the medium-term for terms as long as 10 years. Although the Federal target. After a lengthy period of stability in policy Reserve completed its ‘quantitative easing’ program settings, the Reserve Bank Board adjusted the cash some time ago, central bank balance sheets in rate twice during 2014/15, taking it to 2 per cent, the Japan and Europe are still expanding significantly. lowest recorded on a sustained basis since the 1950s. The Chinese economy has slowed, affecting demand The Reserve Bank continued the build-up of several for natural resources. This has affected Australia’s major projects during 2014/15. As has been noted terms of trade, which have also been driven lower in previous annual reports, these projects are by an increasing supply of commodities, including resulting in a very significant, but largely temporary, from Australia. Financial markets returned to more increase in costs, with most of the likely outlays normal levels of volatility as they contemplated, still in the future as work to deliver key projects among other things, the events in Greece and the gathers further momentum. These costs are mainly, rise and crash of a Chinese equity market bubble. though not entirely, in the IT area, as the projects ANNUAL REPORT 2015 | GOVERNOR’S FOREWORD 1 are very technology intensive. Preparations to Adding the realised valuation gains to underlying introduce a series of banknotes with upgraded earnings results in earnings available for distribution security features, overhauling the technology as per the Reserve Bank Act 1959 of about $3.5 billion. architecture that supports banking services to the The Treasurer decided, after consulting the Board, government, building the Bank’s contribution to that a sum of about $1.6 billion from distributable the New Payments Platform and upgrading the earnings be placed to the credit of the Reserve capacity to assess the quality of collateral that Bank Reserve Fund, effectively the Bank’s capital. may be presented to the Bank at various points of Accordingly, this reserve stood at $12.7 billion at its market operations are all driven by the Bank’s balance date, a strong position given the risks on the Charter obligations. The Bank’s staff numbers are Bank’s balance sheet. The remainder of distributable commensurately rising, with the IT Department by earnings, a sum of about $1.9 billion, will be paid as a far the largest in size, employing most additional dividend to the Commonwealth. staff on limited-term contracts. As always, the Reserve Bank’s management and The cost of running the Reserve Bank’s existing staff have performed to a very high standard, under operations rose by a little more than 1 per cent challenging conditions. This was very clearly in in 2014/15. The additional costs from the projects evidence during the terrible events at the Lindt Café, added a further 3.4 per cent. As the full effect of the adjacent to the Head Office building, in December project workload comes through, total outlays will 2014. The Bank’s building was locked down for rise, reaching a peak during 2015/16. some hours and was not available the following day, The Reserve Bank’s net profit in 2014/15 amounted requiring the Business Resumption Site to be used to $6.9 billion, a significant rise from the previous for all the Bank’s routine operations. The security and year (abstracting from proceeds of the one-off operational areas of the Bank responded admirably grant received from the Australian Government in to these events, despite sharing the profound sense that year). As explained in the chapter on ‘Earnings of loss evident so widely in the community, and all and Distribution’, the fall in the exchange rate has the Bank’s normal operations were able to continue resulted in substantial valuation gains. Part of these without interruption. The Reserve Bank Board and I, were realised as the Bank’s portfolio of foreign personally, record our admiration and appreciation reserves turned over, while the unrealised gains for the skills and dedication of all our people. are set aside against the risk of future losses or will be realised as relevant assets are sold. Underlying earnings remain low because of low yields on the Bank’s portfolio but, at $832 million, were higher than in the previous year as the Bank’s balance sheet Glenn Stevens expanded and ADIs began paying fees associated Governor and Chair, Reserve Bank Board with the Committed Liquidity Facility from the 2 September 2015 beginning of 2015. The full-year effect of these fees will further boost underlying earnings in 2015/16. 2 RESERVE BANK OF AUSTRALIA Part 1: About the Reserve Bank Our Charter, Core Functions and Values In its role as Australia’s central bank, the Reserve Bank of Australia determines and implements monetary policy, undertakes a range of other activities in financial markets and banking, issues the nation’s banknotes and operates infrastructure critical to the payments system. Charter and Core Functions The sixth Statement on the Conduct of Monetary Policy, signed by the Treasurer and the Governor in The Reserve Bank of Australia is established by October 2013 following the election of the Coalition statute as Australia’s central bank. Its enabling Government records the common understanding legislation is the Reserve Bank Act 1959. The Bank of the Government and the Reserve Bank on key pursues national economic policy objectives. Its aspects of the monetary policy framework. responsibility for monetary policy is set out in section 10(2) of the Reserve Bank Act, which states: The Reserve Bank conducts operations in financial markets, operates Australia’s main high-value It is the duty of the Reserve Bank Board, within the payments system and undertakes analysis of limits of its powers, to ensure that the monetary markets and institutional developments. It also and banking policy of the Bank is directed to the participates in discussions with government and greatest advantage of the people of Australia and other domestic regulators about regulatory design that the powers of the Bank … are exercised in such a manner as, in the opinion of the Reserve initiatives, largely through the Council of Financial Bank Board, will best contribute to: Regulators (CFR). The CFR is chaired by the Governor and brings together the Bank, Australian Prudential (a) the stability of the currency of Australia; Regulation Authority,
Recommended publications
  • The Evolution of Banking in Australia
    Software and Technology The evolution of banking in Australia By Amaran Navaratnam* For most Young Credit Professionals car park during Christmas week, as we of Australia (YCPA) our first can shop online. banking experience started with a As our debit and credit cards Commonwealth Bank Dollarmite evolve so do the payment methods. savings account, we were excited Over the last 5 years PayPass and about the moneybox rather than PayWave have made us wave the saving aspect. As we matured goodbye to signing for retail into adolescents so did the banking purchases. In years to come I am experience. sure we will soon be farewelling the In years to come we will all have PIN. Our cards will always revisit the a story to tell our children of when surgeon for a ‘nip and tuck’ to keep we had to wait in line at the branch up with customers evolving needs in a “In years to come for 20 minutes patiently watching card with added benefits and tighter the flip clock. The reaction will be security. we will all have a priceless given what their first banking We have all experienced the gut story to tell our experience will be. wrenching feeling of leaving our wallet Technology and innovation was or purse at home and only realising children of when revolutionary in the late 2000’s half way to work. In 2015 Westpac driving us to the ‘Mobile Commerce’ and Commonwealth bank successfully we had to wait in generation with the ability to pay bills, launched its ‘Cardless Cash’ service do our internet banking and open new enabling us to use our mobile banking line at the branch accounts simply with the use of our app to withdraw money.
    [Show full text]
  • An Empirical Study of International Correspondent Banking in Australia
    University of Wollongong Thesis Collections University of Wollongong Thesis Collection University of Wollongong Year 2001 An empirical study of international correspondent banking in Australia Soon-Lim Chan University of Wollongong Chan, Soon-Lim, An empirical study of international correspondent banking in Aus- tralia, Doctor of Philosophy thesis, Department of Marketing, University of Wollongong, 2001. http://ro.uow.edu.au/theses/1476 This paper is posted at Research Online. Chapter Six i06 CHAPTER SIX: CASE STUDY: CORRRESPONDENT BANKING IN COMMONWEALTH BANK OF AUSTRALIA (CBA) 6.0 INTRODUCTION This is the first component of the three components'core research. This case study is based on rigorous interviews with a group of CBA's senior bank staff including Gavin E J Forte, General Manager, CBA's Institutional Banking; Stephan Symydzuk, Senior Manager, CBA's Technology and Operations; Robert Buchan, Senior Manager, CBA's Risk Management; Keith McDougalI, Senior Manager, Global Payment Services; Paul McMartin, Assistant Manager Exports, International Trade Processing Centre; and Roland Condell, Manager, CBA's Business Banking Centre, Toowoomba. The case is presented in two parts. The first part (section 6.1) sets out CBA's background, history and development, the organisational sfructure, in particular the institutional banking, rationalisation and current development and performance of CBA. The second part is concenfrated on the study of CBA's correspondent banking in section 6.2. CBA's defmition and management of corbanking will be discussed in paragraph 6.2.1, the organisation of CBA's corbanking in paragraph 6.2.2, the purchasmg management of intemational corbanking services and reasons for using corbanking in paragraph 6.2.3, selection criteria of CBA's correspondents and thefr classification corbanking relationships in paragraph 6.2.4, risk management in sub-section 6.2.5, relationships management in paragraph 6.2.6, strategies of development of CBA's corbanking business in paragraph 6.2.7, ftiture of CBA's corbanking in paragraph 6.2.8.
    [Show full text]
  • 6 Ridge St, North Sydney, NSW 2060 P. +61 2 8458 1300 | E
    6 Ridge St, North Sydney, NSW 2060 p. +61 2 8458 1300 | e. [email protected] rmkcrew.com.au DEREK PASCOE TVC Southern Phones (Kim Reddin Prod ) (1 x 30 TVC / 1 x 15 TVC) (DOP) The Athletes Foot (PJL Productions) (DOP) Sydney Three Day Event 2015 Promo (Equestrian Australia) (DOP) “Upfronts” Seven Network (Seven Network Operations) (Lighting Camera) Elgas LPG Bushfire Safety PSA (The Media Collective) (DOP) I FLY Christmas Promotions X 2 (The Media Collective) (DOP) Apollo Medical Institute TVC x 3 (Hart Media) (DOP) B Seen L Plates TVC (Kim Reddin Productions) (DOP) The Athletes Foot (never met a foot campaign x 2) (PJL) (DOP) Ezyfixclip (Kim Reddin Productions) (DOP) Roof Handles (Kim Reddin Productions) (DOP) Tripa-drip (Nim Nat/KR Productions) (DOP) Ausbuy PSA “Buy Australian” campaign (KR Productions) (DOP) Sydney Three Day Event (EFA) (Producer/Editor) Documentary Hard Jobs Down-under (Janus Films/Kabel Ein) (dir: Uli Schmidt) DOP The Last Diggers (NSWFTO/Albatross/SBS) (dir: Kim Reddin) DOP Outback Survival (Gallileo/Pro Seiben/Go Films) (dir: Uli Schmidt) DOP “Shark Fin Soup” (Wild Aid/ CCTV) (dir: Peter Knights) DOP (Australian Locations) Wanderlust Empire (Wanderlust Empire Ltd) (dir: Wetham Allpress) (Pickups- Australia) Film / Drama Whatever Happened to Harold Smith (West 11 Films) (dir: Peter Hewitt) Additional Camera 2nd unit The Screaming Silent (Albedo Films/Cut Out Films) (dir: Dave Davison) 2nd unit DOP/Additional Photography Reality / Lifestyle TV Galileo “Honey from the Tap” (Pro Seiben) (2015) (feature german science
    [Show full text]
  • Deregulation, Entry of Foreign Banks and Bank Efficiency in Australia
    DEREGULATION, ENTRY OF FOREIGN BANKS AND BANK EFFICIENCY IN AUSTRALIA JAN-EGBERT STURM BARRY WILLIAMS CESIFO WORKING PAPER NO. 816 CATEGORY 9: INDUSTRIAL ORGANISATION DECEMBER 2002 An electronic version of the paper may be downloaded • from the SSRN website: www.SSRN.com • from the CESifo website: www.CESifo.de CESifo Working Paper No. 816 DEREGULATION, ENTRY OF FOREIGN BANKS AND BANK EFFICIENCY IN AUSTRALIA Abstract This study considers the efficiency of banking in Australia during the post- deregulation period 1988-2001. Since 1986 restrictions upon foreign bank entry and foreign ownership have been affectively abolished. Using Data Envelopment Analysis (DEA) and Malmquist Indices, we find that the new foreign banks are more (input) efficient than domestic banks, mainly due to their superior scale efficiency. However, this superior efficiency did not necessarily result in superior profits. Our results are consistent with the limited global advantage hypothesis of Berger et al (2000). We argue that the major Australian banks have used size as a barrier to entry to the new entrants in the post-deregulation period. Furthermore, bank efficiency seems to have increased post-deregulation and the competition resulting from diversity in bank types was important to prompt improvements in efficiency. Finally, the recession of the early 1990s resulted in a distinct shift in the process of efficiency changes. Keywords: foreign banks, deregulation, data envelopment analysis, Malmquist indices. JEL Classification: G21, G28. Jan-Egbert Sturm Barry Williams CESifo (University of Munich & Ifo School of Business Institute for Economic Research) Bond University Poschingerstraße 5 Gold Coast 81679 Munich Queensland 4229 Germany Australia [email protected] [email protected] 1.
    [Show full text]
  • Foundations of the Australian Monetary System 1788-1851
    Foundations of the Australian Monetary System 1788-1851 Butlin, S. J. (1910-1977) University of Sydney Library Sydney, Australia 2002 http://setis.library.usyd.edu.au/oztexts © University of Sydney Library. The texts and images are not to be used for commercial purposes without permission Source Text: Prepared from the print edition published by Sydney University Press Sydney 1968 Reproduced with permission. All quotation marks are retained as data. First Published: 1953 332.4994/33 setis australian etexts prose nonfiction 1940- Foundations of the Australian Monetary System 1788-1851 Professor of Economics, University of Sydney Sydney Sydney University Press 1968 Preface THE story of Australian money is peculiarly fascinating for it is possible to trace its development from the primitive beginnings in a penal colony with no initial monetary arrangements through to a fully fledged modern system. This has more than its individual interest, for the opportunity to study in detail an economy built up from its earliest beginnings should throw light on the general theory of economic development. That theory, in its various presentations, presupposes a fully developed economy, of a capitalist type, and neither of its two most impressive contributions (by Marx and Schumpeter) is an exception. For the present study the year 1851 was chosen in advance as a halting point, as being the year of the separation of Victoria from New South Wales and of the discovery of gold, closely followed by the coming of responsible government. It has proved fully justified after the event, for, as the story will show, one finds development pausing in the late 'forties, different sections of the monetary system reflecting the temporary stability of the economy as a whole.
    [Show full text]
  • The Australian Banking Sector Reforms: Progress and Challenges
    Corporate Ownership & Control / Volume 10, Issue 4, 2013, Continued - 5 THE AUSTRALIAN BANKING SECTOR REFORMS: PROGRESS AND CHALLENGES Sheilla Nyasha*, N M Odhiambo** Abstract This paper gives an overview of the Australian banking sector; it highlights the reforms since the 1970s; it tracks the growth of the banking sector in response to the reforms implemented over the past five decades; and finally, it highlights the challenges facing the Australian banking sector. The country’s banking sector consists of more than 60 commercial banks, with the Reserve Bank of Australia, the country’s central bank, at the apex. Since the 1980s, the Australian government has implemented a number of banking sector reforms in order to safeguard and improve the banking sector. The response to these reforms by the banking sector has been varied. As a result of these reforms, there has been an increase in the number of banks and a decrease in the number of building societies and credit unions. There has also been an improvement in the central bank’s oversight of the financial institutions, and an enforcement of the banks’ capital-adequacy requirements. Currently, Australia has one of the most developed banking systems in the world. The country has enjoyed a substantial bank-based financial sector development over the years, and its institutional framework has also grown stronger. However, like any other country’s financial system, the Australian banking system still faces wide-ranging challenges, such as bank concentration and exposure. Keywords: Australia, Reserve Bank of Australia, banking sector, reforms *Corresponding author. Department of Economics, University of South Africa, P.O Box 392, UNISA, 0003, Pretoria, South Africa Email: [email protected] **Department of Economics, University of South Africa, P.O Box 392, UNISA, 0003, Pretoria, South Africa Email: [email protected], [email protected] 1 Introduction sample of more than 80 countries.
    [Show full text]
  • Bank in Australia with Confidence
    Bank in Australia with confidence. Moving to Australia? We can help. There’s a lot to organise when you move to a new country. As well as relocating yourself and your belongings, you also need to move your finances. That’s where we can help. To get you started, here’s a quick summary of how banking works in Australia. Currency Opening an account • Australian Dollar (AUD $) – there are 100 cents in one dollar. Before opening a bank account, you’ll need to consider the following: • Australian Dollar notes come in denominations of $5, $10, $20, $50 and $100. Documentation needed for identification • Australian coins come in denominations of 5c, 10c, 20c, 50c, $1 and $2. • Under Australian law, all banks are responsible for verifying your identity if you wish to open a bank account. • Prices in shops are rounded up or down to the nearest 5 cents You’ll be asked to provide specific forms of identification when paying in cash e.g. you would pay $2.95 if the total spend e.g. passport or driver licence. comes to $2.97, but $3 for a total spend of $2.98. • It’s recommended you bring the following documentation (originals are required) with you from your home country: Trading hours – Passport – Driver licence (if you have one) Trading hours vary between bank branches but are generally: – Visa – Birth certificate (for children's accounts) Monday to Thursday: 9.30am – 4.00pm, on Friday until 5.00pm Tax File Number (TFN) Saturday and Sunday: • In Australia, a TFN is used to help identify you for Some banks offer weekend trading hours at selected branches.
    [Show full text]
  • Customer Owned Banking Association (COBA) Is the Industry Advocate for Australia’S Customer Owned Banking Sector
    Submission to Productivity Commission Inquiry into Competition in the Australian Financial System 15 September 2017 COBA Submission to Productivity Commission Inquiry into Competition in the Australian Financial System 2 About us The Customer Owned Banking Association (COBA) is the industry advocate for Australia’s customer owned banking sector. It is owned by its 72 member institutions: 51 credit unions, 3 building societies, 16 mutual banks and 2 others; and a number of affiliate members. COBA provides representation and advocacy for its members to: • federal and state governments • regulators, such as APRA and ASIC • the media • industry and consumer groups, and • the general public and other stakeholders. It also provides member institutions with expert advisory and support services, such as fraud & financial crimes and research. Contact: Luke Lawler, Director - Policy, Mark Nguyen, Policy Adviser, COBA Submission to Productivity Commission Inquiry into Competition in the Australian Financial System 3 Table of Contents Executive Summary .................................................................................................. 4 Recommendations .................................................................................................... 6 Sector Overview ....................................................................................................... 7 The customer-owned banking model ........................................................................... 7 Trends in the customer-owned banking sector .............................................................
    [Show full text]
  • 11. Financial Reform in Australia and China Alexander Ballantyne, Jonathan Hambur, Ivan Roberts and Michelle Wright1
    11. Financial Reform in Australia and China Alexander Ballantyne, Jonathan Hambur, Ivan Roberts and Michelle Wright1 Introduction The financial architecture currently in place in the People’s Republic of China shares some characteristics with Australia’s financial system prior to deregulation in the late 1970s and early 1980s. In the late 1970s, Australia maintained a managed exchange rate regime, capital account transactions were subject to restrictions and the banking system was tightly regulated. Taken at face value, this is similar to China today, where portfolio capital flows are largely prohibited, the renminbi exchange rate continues to be managed and banking sector interest rates are only partially liberalised. Naturally, there are important differences as well. Australia’s weight in the global economy was smaller and its financial reforms occurred in the context of a much smaller and less integrated global financial system. While its capital account in the 1970s and early 1980s was more tightly restricted than other similar economies, Australia was somewhat more open to foreign portfolio investment than China is currently. China receives relatively larger direct investment flows today than Australia did prior to capital account liberalisation. In addition, parts of the Chinese financial system are now more developed than the Australian financial system was prior to financial deregulation. Notwithstanding these differences, the Australian example serves to underscore both the potential importance of sequencing and the powerful catalytic effects of a decision to liberalise. The floating exchange rate is now widely recognised as having played a crucial role in helping to steer the economy through challenging periods (Beaumont and Cui 2007; Stevens 2013).
    [Show full text]
  • The Australian Financial System
    3. The Australian Financial System The Australian financial system remains in good expected to persist as banks raise more capital condition, with banks’ resilience to adverse to comply with revised regulatory standards. shocks having increased over recent years. Banks’ The downward pressure on ROE may create an capital ratios are above regulatory minimums incentive for banks to take on additional risk to and those of most international peers (when protect returns. A key element of preventing this measured on a comparable basis). Capital is to ensure that banks retain sound risk culture generation is being supported by high levels of and governance frameworks. The industry has aggregate profit, though there has been little announced a number of initiatives to improve its growth in profit over the past couple of years. risk culture and regulators have increased their Banks’ assets also continue to perform strongly; focus on bank culture and risk governance. the charge for bad and doubtful debts remains Risks within the non-bank financial sector also low and non-performing assets have stabilised appear manageable. General insurers’ profits over the past six months, after increasing a little increased in the second half of 2016, underpinned in the first half of 2016. by an improvement in underwriting results as Overall credit growth has been broadly stable commercial premium rates increased following over the past six months, but the composition of an extended period of underpricing and net this growth has changed, with investor housing claim costs declined. (The cost of Cyclone credit growth increasing. Foreign bank lending Debbie is yet to be fully determined.) In contrast, – which tends to be more cyclical than lending life insurers’ profits fell because of rising claims by local banks – has continued to grow at a rapid that compounded long-standing deficiencies pace, with growth concentrated in infrastructure in pricing, provisioning and claims processes and commercial property loans.
    [Show full text]
  • REPORT 600: Review of Buy Now Pay Later Arrangements
    REPORT 600 Review of buy now pay later arrangements November 2018 About this report This report summarises the findings of ASIC’s review of ‘buy now pay later’ arrangements. These arrangements allow consumers to buy and receive goods and services immediately but pay for that purchase over time. The aim of our review was to develop a broad understanding of this industry and to identify potential risks for consumers. REPORT 600: Review of buy now pay later arrangements About ASIC regulatory documents In administering legislation ASIC issues the following types of regulatory documents. Consultation papers: seek feedback from stakeholders on matters ASIC is considering, such as proposed relief or proposed regulatory guidance. Regulatory guides: give guidance to regulated entities by: explaining when and how ASIC will exercise specific powers under legislation (primarily the Corporations Act) explaining how ASIC interprets the law describing the principles underlying ASIC’s approach giving practical guidance (e.g. describing the steps of a process such as applying for a licence or giving practical examples of how regulated entities may decide to meet their obligations). Information sheets: provide concise guidance on a specific process or compliance issue or an overview of detailed guidance. Reports: describe ASIC compliance or relief activity or the results of a research project. Disclaimer This report does not constitute legal advice. We encourage you to seek your own professional advice to find out how the Corporations Act and other applicable laws apply to you, as it is your responsibility to determine your obligations. Examples in this report are purely for illustration; they are not exhaustive and are not intended to impose or imply particular rules or requirements.
    [Show full text]
  • Deloitte's Choice in Banking Report
    Choice in banking Choice in banking Australian Banking Association 2019 1 Choice in banking Contents Executive summary i 1 Retail banking in Australia 1 1.1 State of competition 1 1.2 Importance of switching 3 1.3 This report 3 2 Choice in banking 5 2.1 Providers and products 6 2.2 Everyday transaction accounts 8 2.3 Credit cards 9 2.4 Mortgages 10 2.5 Key differences between products and cohorts 11 3 Switching in banking 13 3.1 Most consumers are satisfied 14 3.2 Consumers are actively looking at their options 15 3.3 Tools to aid choice 17 3.4 Barriers and costs 20 3.5 Decision to switch 23 3.6 Assessing switching levels 25 3.7 Looking forward 26 Conclusions 28 References 30 Limitation of our work 33 General use restriction 33 ii Executive summary There are a wide range of providers and products in the retail banking market in Australia. Consumers benefit from the ability to choose between products and providers in order to meet their needs and preferences. Recently, a number of public policy discussions have raised concerns about competition in the banking sector. Specifically, consumer switching behaviour in retail banking has been the subject of discussion by the Productivity Commission and the Australian Competition and Consumer Commission. The ability to switch allows individuals to obtain a product that is better suited to their needs while also, more broadly, support competition in the overall market. A range of factors – including innovation, information and barriers to entry – will determine the nature and intensity of competition in the retail banking market.
    [Show full text]