CQIB STUDY EXAMS GUIDE 2025/2026 QUESTIONS WITH
ANSWERS RATED A+
✔✔Basel III Liquidity Reforms - ✔✔Global minimum quantitative requirements that
banks are required to disclose
- Liquidity Coverage Ratio (LCR)
- Net Stable Funding Ratio (NSFR)
✔✔Liquidity Coverage Ratio (LCR) - ✔✔AUS banks to hold liquid assets to meet 30
days net cash outflows (projected by APRA stress scenario)
✔✔Net Stable Funding Ratio (NSFR) - ✔✔AUS banks to fund assets with sufficient
stable funding to reduce risk over 1 year horizon, prescribed by APRA
✔✔Capital Adequacy Requirements - Tier - ✔✔Tier 1: ordinary shares and
retained earnings (profit they keep)
Tier 2: Funding sources that rank below a bank's depositors, backup for when tier 1
runs out
✔✔Four Pillar Policy - ✔✔government rejects any mergers between the big four banks
✔✔2017 Better Banking Program - 6 initiatives - ✔✔- Independent review of retail
banking remuneration and overarching principles on how bank pay staff
- Getting problems fixed
- Resolving disputes
- Protecting whistle blowers
- Stopping poor conduction moving around the industry
- Independent review of the Code of Banking Practice
✔✔Authorised Deposit Taking Institutions (ADIs) - 2 - ✔✔Building Societies: a mutual
institution, most people who have savings accounts or mortgages are members, has a
board of directors that set the strategy, each member has voting rights on how it is run
Credit Unions: also mutually owned, provide basic/low cost loans and payment services,
pool combined resources, members must share common bond (e.g. same employer)
✔✔Non-ADI Financial Intermediaries - 3 - ✔✔Money Market Corporations (assets
>50M): operate in wholesale market, borrow and lend to large corporations or
government agencies
Finance Companies (assets >50M): provide loans to households and small to medium
businesses, raise funds from wholesale and retail
Securitisation Vehicles: issue securities backed by pools of assets, usually guaranteed
by third parties
,✔✔Life Insurance Companies - ✔✔- provide life, accident and disability insurance,
annuities, investment and superannuation.
- assets managed in statutory funs on a fiduciary basis and invested mostly in equities
and debt securities
✔✔General Insurance Companies - ✔✔- provide range of insurance for property,
vehicle, employers' liability
- Assets invested in deposits and loans, government securities and equities
✔✔Superannuation and Approved Deposit Funds (ADFs) - ✔✔Superannuation funds:
accept super, trustees control these funds
ADFs: accept superannuation lump sums and termination payments, managed by
professional fund managers
Invested: in range of assets (equities, property, debt securities and deposits)
✔✔Unit Trusts and Managed Funds - ✔✔pool investor funds into specific types of
assets, most are managed by subsidiaries of bank, insurance companies or money
market corporations
✔✔Cash Management Trusts - ✔✔- type of unit trust, governed by trust deed and open
to the public
- invest only in financial securities through short term money markets
✔✔Trustee Companies (Common Funds) - ✔✔- pool into common funds money
received from the public or estates or under power of attorney
- invested in specific types of assets
✔✔Friendly Societies - ✔✔- mutually owned co-operative financial institutions, use trust
like structure
- benefits are investment products through insurance or education bonds, funeral,
accident, sickness or other benefits
✔✔Primary Market - ✔✔new issues of share or securities are offer for the first time,
usually for fund raising from gov or companies (e.g. IPO)
✔✔Secondary Market - ✔✔securities are traded after their initial issue in primary market
✔✔Exchange Trade Markets - ✔✔organised and traded on physical or electronic
exchange facility, with business rules, e.g. ASX
✔✔Over the Counter Markets (OTC) - ✔✔non-standardised and negotiated between the
parties involved in the transaction
, ✔✔Interest Rate or Debt Market - ✔✔trading, short / long term securities such as gov or
corp bonds
✔✔Foreign Exchange Market - ✔✔exchanging currencies, open 24 hours, largest
financial market
✔✔Equities Market - ✔✔trading shares in listed companies
✔✔Commodities Market - ✔✔trading in raw or primary products such as wheat, grain,
cattle and electricity
✔✔Derivatives Market - ✔✔a contract whose value is derived from one or more
underlying assets or instruments; e.g. forward rate agreements or underlying exchange
rates
✔✔Financial Market Participants - 2 - ✔✔Price Makers: banks, NBFIs and brokers who
act as intermediaries
Price Takers: other participants, such as crops, gov and individuals who are end users
✔✔Microeconomics - ✔✔- decision that people and businesses make regarding
allocation or resources and prices of goods and services
- eg Supply and demand, price levels, taxes, gov regulations
✔✔Macroeconomics - ✔✔- issues that effect the economy as a whole
- eg unemployment rate, Gross Domestic Product (GDP), inflation, exports and imports
✔✔Fiscal Policy - ✔✔- gov spending and tax that influences the economy
- impact on economy; influences purchase power and spending patterns
- Budget Deficit: spending > collecting
- Budget surplus: collecting > spending
✔✔Monetary Policy - ✔✔- Reserve Bank responsible to maintain price stability, full
employment and economic prosperity by managing inflation
- cash rate: interest rate on overnight loans in the money market
- Aim to keep inflation to 2-3% on average over medium term
- Controlling inflation keeps the value of money
✔✔Blockchain - ✔✔A distributed ledger using peer-to-peer technology, providing real
time records that are replicated among the participants
✔✔Moral Absolutism and Relativism - ✔✔Moral Absolutism: there are universal rules
that apply to everyone
Moral Relativism: some universal rules, but;
ANSWERS RATED A+
✔✔Basel III Liquidity Reforms - ✔✔Global minimum quantitative requirements that
banks are required to disclose
- Liquidity Coverage Ratio (LCR)
- Net Stable Funding Ratio (NSFR)
✔✔Liquidity Coverage Ratio (LCR) - ✔✔AUS banks to hold liquid assets to meet 30
days net cash outflows (projected by APRA stress scenario)
✔✔Net Stable Funding Ratio (NSFR) - ✔✔AUS banks to fund assets with sufficient
stable funding to reduce risk over 1 year horizon, prescribed by APRA
✔✔Capital Adequacy Requirements - Tier - ✔✔Tier 1: ordinary shares and
retained earnings (profit they keep)
Tier 2: Funding sources that rank below a bank's depositors, backup for when tier 1
runs out
✔✔Four Pillar Policy - ✔✔government rejects any mergers between the big four banks
✔✔2017 Better Banking Program - 6 initiatives - ✔✔- Independent review of retail
banking remuneration and overarching principles on how bank pay staff
- Getting problems fixed
- Resolving disputes
- Protecting whistle blowers
- Stopping poor conduction moving around the industry
- Independent review of the Code of Banking Practice
✔✔Authorised Deposit Taking Institutions (ADIs) - 2 - ✔✔Building Societies: a mutual
institution, most people who have savings accounts or mortgages are members, has a
board of directors that set the strategy, each member has voting rights on how it is run
Credit Unions: also mutually owned, provide basic/low cost loans and payment services,
pool combined resources, members must share common bond (e.g. same employer)
✔✔Non-ADI Financial Intermediaries - 3 - ✔✔Money Market Corporations (assets
>50M): operate in wholesale market, borrow and lend to large corporations or
government agencies
Finance Companies (assets >50M): provide loans to households and small to medium
businesses, raise funds from wholesale and retail
Securitisation Vehicles: issue securities backed by pools of assets, usually guaranteed
by third parties
,✔✔Life Insurance Companies - ✔✔- provide life, accident and disability insurance,
annuities, investment and superannuation.
- assets managed in statutory funs on a fiduciary basis and invested mostly in equities
and debt securities
✔✔General Insurance Companies - ✔✔- provide range of insurance for property,
vehicle, employers' liability
- Assets invested in deposits and loans, government securities and equities
✔✔Superannuation and Approved Deposit Funds (ADFs) - ✔✔Superannuation funds:
accept super, trustees control these funds
ADFs: accept superannuation lump sums and termination payments, managed by
professional fund managers
Invested: in range of assets (equities, property, debt securities and deposits)
✔✔Unit Trusts and Managed Funds - ✔✔pool investor funds into specific types of
assets, most are managed by subsidiaries of bank, insurance companies or money
market corporations
✔✔Cash Management Trusts - ✔✔- type of unit trust, governed by trust deed and open
to the public
- invest only in financial securities through short term money markets
✔✔Trustee Companies (Common Funds) - ✔✔- pool into common funds money
received from the public or estates or under power of attorney
- invested in specific types of assets
✔✔Friendly Societies - ✔✔- mutually owned co-operative financial institutions, use trust
like structure
- benefits are investment products through insurance or education bonds, funeral,
accident, sickness or other benefits
✔✔Primary Market - ✔✔new issues of share or securities are offer for the first time,
usually for fund raising from gov or companies (e.g. IPO)
✔✔Secondary Market - ✔✔securities are traded after their initial issue in primary market
✔✔Exchange Trade Markets - ✔✔organised and traded on physical or electronic
exchange facility, with business rules, e.g. ASX
✔✔Over the Counter Markets (OTC) - ✔✔non-standardised and negotiated between the
parties involved in the transaction
, ✔✔Interest Rate or Debt Market - ✔✔trading, short / long term securities such as gov or
corp bonds
✔✔Foreign Exchange Market - ✔✔exchanging currencies, open 24 hours, largest
financial market
✔✔Equities Market - ✔✔trading shares in listed companies
✔✔Commodities Market - ✔✔trading in raw or primary products such as wheat, grain,
cattle and electricity
✔✔Derivatives Market - ✔✔a contract whose value is derived from one or more
underlying assets or instruments; e.g. forward rate agreements or underlying exchange
rates
✔✔Financial Market Participants - 2 - ✔✔Price Makers: banks, NBFIs and brokers who
act as intermediaries
Price Takers: other participants, such as crops, gov and individuals who are end users
✔✔Microeconomics - ✔✔- decision that people and businesses make regarding
allocation or resources and prices of goods and services
- eg Supply and demand, price levels, taxes, gov regulations
✔✔Macroeconomics - ✔✔- issues that effect the economy as a whole
- eg unemployment rate, Gross Domestic Product (GDP), inflation, exports and imports
✔✔Fiscal Policy - ✔✔- gov spending and tax that influences the economy
- impact on economy; influences purchase power and spending patterns
- Budget Deficit: spending > collecting
- Budget surplus: collecting > spending
✔✔Monetary Policy - ✔✔- Reserve Bank responsible to maintain price stability, full
employment and economic prosperity by managing inflation
- cash rate: interest rate on overnight loans in the money market
- Aim to keep inflation to 2-3% on average over medium term
- Controlling inflation keeps the value of money
✔✔Blockchain - ✔✔A distributed ledger using peer-to-peer technology, providing real
time records that are replicated among the participants
✔✔Moral Absolutism and Relativism - ✔✔Moral Absolutism: there are universal rules
that apply to everyone
Moral Relativism: some universal rules, but;
