CQIB QUESTIONS AND ANSWERS
Which regulator makes and enforces rules which govern the capital adequacy of
Australian Banks? - The Australian Prudential Regulation Authority - APRA
What events occurred in the Banking Industry in 1800s and early 1900s? - First Bank in
Australia was Bank of NSW, Established in 1817 Sydney.
Discovery of gold in 1851 led to minting of Australia's own gold coins spurring
development of Banking.
Boom in Australian property market in 1800s led to Banking crisis in 1893.
What events occurred in 1910-1920 in the Banking Industry? - Australian pound was
issues as the Legal tender in Australia and the Australian Notes act 1910 assigned
responsibility for the issue of Bank notes to the Commonwealth Treasury.
What events occurred in 1911-1913 in the Banking Industry? - Federal government
established the Commonwealth Bank, which by 1913 had branches in 6 states.
What are other Finance service providers?
Authorised Deposit-Taking Institutions (ADI's) - Building Societies:
Credit Unions:
What is a Building Society? - A mutual institution, which means that most people who
have a savings account, or mortgage are members. Each building society and are
responsible for setting its strategy.
- Owner by and for the members
- Limit on proportion of their funds that building societies can raise from wholesale
money market
- Reinvest surplus revenue into the business to provide new products and services.
What is a credit union? - a non-profit-making money cooperative whose members can
borrow from pooled deposits at low interest rates.
What are non-ADI's financial intermediaries? - - Money Markets Corporations
- Finance Companies
- Securitisation Vehicles
What are the 4 types of financial markets - 1. Primary Markets
2. Secondary Market
3. Exchange Traded Markets
4. Over the counter markets
What is the Interest rate or Debt market. - Trading (Buying and Selling) includes shart
term securities and long term securities such as government and corporate bonds.
,What is the Foreign Exchange Market? - Exchanging one currency for another. Largest
financial market in the World and 24 hours a day.
Trading shared in listed companies - What is the equities market?
What is the Commodities Market? - Trading in raw or primary products such as wheat,
grain, cattle., or electricity.
What is the Derivatives Market? - A contract whose value is derived from one or more
underlining assets or instruments; for example, forward rate agreements or underlying
exchange rates.
What is microeconomics? - the study of how households and firms make decisions and
how they interact in markets. Supply and demand that impact the price levels in the
economy. Taxes and Regulation created by governments.
What is macroeconomics? - The study of the economy as a whole
- Unemployment rates
- Gross Domestic Product - GDP
- Inflation
- Export and Imports
What events occurred in 1920 in the Banking Industry? - Commonwealth performed
some central Bank functions, which greatly expanded in World War II.
What events occurred in 1930-1931 in the Banking Industry? - 1931 - The Great
Depression, By the end Banking Industry became tightly regulated. Banks classified as
either savings or trading Banks.
What events occurred in 1990-2000 in the Banking Industry? - 14/01/1960 - Reserve
Bank of Australia was created
1969 - Rolled out ATMs, and early 1970 BSB identifier was introduced.
What events occurred in 2000-2017 in the Banking Industry? - Renewed emphasis on
corporate governance, values, ethics. Jan 17 - Better Banking program launched with
initiatives:
- Independent review of retail Banking remuneration and how we pay staff.
- Getting problems fixed
- Protecting whistle-blowers
- Stopping poor conduct, and review of code of Banking practice
What are the Australian Economy Facts and Figures - 14th Largest economy measured
by GDP 1.99 Trillon - 2019
- Australian Labour force 12.3 millions June 2020
- Low levels of inflation 2% July 2020
- Unemployment rate 7%
, What is Fiscal Policy? - Government spending and taxation that influences the
economy.
What is the Monetary Policy - RBA is responsible for Australians monetary policy - aims
to protect price stability full employment and economic prosperity.
What events occurred in 1980's in the Banking Industry? - Government adopted the four
pillars policy. Announced it would reject any mergers between the Big 4 Banks.
- NAB
- CBA
- Westpac
- ANZ
What is the role of the Bank? - 1. Act as a financial intermediary between savers &
borrowers.
2. Contributes to the development of the economy
What is financial intermediation? - The process of pooling funds from savers and using
these funds to provide loans to borrowers. The Bank acts as a go between, or
intermediary for those who have extra money and those who want to borrow.
What are the 4 types of investment Banking? - 1. Debt Capital Markets
2. Equity Capital Markets
3. Private Placements
4. Mergers and Acquisitions
What is Debt Capital Markets? - Where a large company may want to build a factory
and is looking to issue bond financing to finance its expansion, or if a government wants
to finance the building of an airport, highway, or other large municipal project, it may
issue bonds to raise capital.
What is Equity Capital Markets? - Where a company needs more money to grow and
decides to raise the funds by undertaking an initial public offering (IPO) whereby it sells
its shares to the public and a wider pool of investors for the first time.
What is Private Placements? - Where customers place an offering of bonds with an
institutional investor such as an insurance company or a retirement fund. Often this can
be a fast-track option due to lower regulatory requirements.
What is Mergers and Acquisitions? - Where a company is looking to buy another
company, investment banks offer advice on how the company should proceed with the
acquisition, including the pricing of the offer.
What is a Key Risk for Investment Bankers? - Conflicts of interest - can occur when
investment bankers, who have access to confidential information from clients related to
Which regulator makes and enforces rules which govern the capital adequacy of
Australian Banks? - The Australian Prudential Regulation Authority - APRA
What events occurred in the Banking Industry in 1800s and early 1900s? - First Bank in
Australia was Bank of NSW, Established in 1817 Sydney.
Discovery of gold in 1851 led to minting of Australia's own gold coins spurring
development of Banking.
Boom in Australian property market in 1800s led to Banking crisis in 1893.
What events occurred in 1910-1920 in the Banking Industry? - Australian pound was
issues as the Legal tender in Australia and the Australian Notes act 1910 assigned
responsibility for the issue of Bank notes to the Commonwealth Treasury.
What events occurred in 1911-1913 in the Banking Industry? - Federal government
established the Commonwealth Bank, which by 1913 had branches in 6 states.
What are other Finance service providers?
Authorised Deposit-Taking Institutions (ADI's) - Building Societies:
Credit Unions:
What is a Building Society? - A mutual institution, which means that most people who
have a savings account, or mortgage are members. Each building society and are
responsible for setting its strategy.
- Owner by and for the members
- Limit on proportion of their funds that building societies can raise from wholesale
money market
- Reinvest surplus revenue into the business to provide new products and services.
What is a credit union? - a non-profit-making money cooperative whose members can
borrow from pooled deposits at low interest rates.
What are non-ADI's financial intermediaries? - - Money Markets Corporations
- Finance Companies
- Securitisation Vehicles
What are the 4 types of financial markets - 1. Primary Markets
2. Secondary Market
3. Exchange Traded Markets
4. Over the counter markets
What is the Interest rate or Debt market. - Trading (Buying and Selling) includes shart
term securities and long term securities such as government and corporate bonds.
,What is the Foreign Exchange Market? - Exchanging one currency for another. Largest
financial market in the World and 24 hours a day.
Trading shared in listed companies - What is the equities market?
What is the Commodities Market? - Trading in raw or primary products such as wheat,
grain, cattle., or electricity.
What is the Derivatives Market? - A contract whose value is derived from one or more
underlining assets or instruments; for example, forward rate agreements or underlying
exchange rates.
What is microeconomics? - the study of how households and firms make decisions and
how they interact in markets. Supply and demand that impact the price levels in the
economy. Taxes and Regulation created by governments.
What is macroeconomics? - The study of the economy as a whole
- Unemployment rates
- Gross Domestic Product - GDP
- Inflation
- Export and Imports
What events occurred in 1920 in the Banking Industry? - Commonwealth performed
some central Bank functions, which greatly expanded in World War II.
What events occurred in 1930-1931 in the Banking Industry? - 1931 - The Great
Depression, By the end Banking Industry became tightly regulated. Banks classified as
either savings or trading Banks.
What events occurred in 1990-2000 in the Banking Industry? - 14/01/1960 - Reserve
Bank of Australia was created
1969 - Rolled out ATMs, and early 1970 BSB identifier was introduced.
What events occurred in 2000-2017 in the Banking Industry? - Renewed emphasis on
corporate governance, values, ethics. Jan 17 - Better Banking program launched with
initiatives:
- Independent review of retail Banking remuneration and how we pay staff.
- Getting problems fixed
- Protecting whistle-blowers
- Stopping poor conduct, and review of code of Banking practice
What are the Australian Economy Facts and Figures - 14th Largest economy measured
by GDP 1.99 Trillon - 2019
- Australian Labour force 12.3 millions June 2020
- Low levels of inflation 2% July 2020
- Unemployment rate 7%
, What is Fiscal Policy? - Government spending and taxation that influences the
economy.
What is the Monetary Policy - RBA is responsible for Australians monetary policy - aims
to protect price stability full employment and economic prosperity.
What events occurred in 1980's in the Banking Industry? - Government adopted the four
pillars policy. Announced it would reject any mergers between the Big 4 Banks.
- NAB
- CBA
- Westpac
- ANZ
What is the role of the Bank? - 1. Act as a financial intermediary between savers &
borrowers.
2. Contributes to the development of the economy
What is financial intermediation? - The process of pooling funds from savers and using
these funds to provide loans to borrowers. The Bank acts as a go between, or
intermediary for those who have extra money and those who want to borrow.
What are the 4 types of investment Banking? - 1. Debt Capital Markets
2. Equity Capital Markets
3. Private Placements
4. Mergers and Acquisitions
What is Debt Capital Markets? - Where a large company may want to build a factory
and is looking to issue bond financing to finance its expansion, or if a government wants
to finance the building of an airport, highway, or other large municipal project, it may
issue bonds to raise capital.
What is Equity Capital Markets? - Where a company needs more money to grow and
decides to raise the funds by undertaking an initial public offering (IPO) whereby it sells
its shares to the public and a wider pool of investors for the first time.
What is Private Placements? - Where customers place an offering of bonds with an
institutional investor such as an insurance company or a retirement fund. Often this can
be a fast-track option due to lower regulatory requirements.
What is Mergers and Acquisitions? - Where a company is looking to buy another
company, investment banks offer advice on how the company should proceed with the
acquisition, including the pricing of the offer.
What is a Key Risk for Investment Bankers? - Conflicts of interest - can occur when
investment bankers, who have access to confidential information from clients related to
