Assignment on Banking and Finance
Added on - 28 May 2020
Showing pages 1 to 4 of 13 pages
Running head: BANKING AND FINANCEBanking and FinanceName of the StudentName of the UniversityAuthor Note
1BANKING AND FINANCEIntroductionOne of the primary dominating economies in the global scenario, with significantlyimpressive growth in the almost all the economic indicators over the years, is the economy ofAustralia. In the last few decades, the Australian economy has been characterized by stronggrowth trends in GDP, more or less stable price levels with moderate fluctuations, expansion ofemployment scopes and a comparative high standard of living of the residents in general. Thecountry has been prospering in terms of the commercial and trade aspects, which in turn isattracting investments and business from all parts of the world (Pecotich and Shultz 2016).The most significant contributor to the economic growth of the country, over the last fewdecades, is the impressive growth of the industrial and commercial sector of the country. Theoverall efficient corporate environment, productive and skilled workforce and other positiveaspects of the country has facilitated the rapid development of the industrial sector of thecountry, which has gained significant international attention due to their robust growth trends(Wu and Shen 2013). There are several industries in Australia, whose growth of productivity;profitability and domain of operations have been significantly noticeable and higher than theircounterparts in other economies have. One of such dominant industries in the country, which hasnot only developed immensely over time, but has also contributed significantly in shaping up theAustralian economy as a whole is the banking and financial industry of the country (Pérez,Martínez and Del Bosque 2013).The banking sector of Australia has developed over time, to be one of the most stablygrowing industries in the country and has also facilitated the commercial activities in the countryextensively. The banks deal with both the domestic as well as international monetary dynamicsof the country and their efficiency and credibility attracts huge investments from all the cornersof the world, in the business sectors of the country. However, in spite of their exemplary growthover the years, the banking sector of Australia, in the last decade, has been facing several criticalissues in its operational framework and has been losing out its credibility as well as clientele(both domestic as well as international) due to severe misconducts and breach of corporate ethicsin their operations. The extent of these problems, being increasing alarmingly, and thegovernment of the country has proposed the establishment of a Royal Commission, forinvestigating into the banking misconduct issues, issues of unethical usages of superannuation
2BANKING AND FINANCEfunds and other breaching aspects, which have been plaguing the financial sector of the country(NewsComAu, 2018).The essay, taking into consideration the banking sector issues in concern, tries to discussthe needs for the establishment of the Royal Commission in the banking sector of the country. Italso tries to discuss the scopes of this Commission, the difference of the same from thepreviously conducted inquiries and the responsibilities, which the Commission is expected to bebestowed with. In the last section of the essay, the probable limitations of such a Commission arediscussed with the possible recommendations for the eradication of the same.Australian Banking and Financial IndustryAs discussed above, over the last few decades, the banking industry of Australia has beendeveloping efficiently and expanding its domain of operations not only in all parts of the countrybut also in international economic framework. It is important to discuss in brief the working andfeatures of this industry, for understanding the causes of the negative occurrences in the recentperiod and their implications, which has led to the proposal of establishment of the Commission(Abbott and Wang 2013).The banking and financial sector of Australia, has been primarily characterized by acompetitive, competent and efficient corporate sector, which operates in a hugely productive andprofitable environment with consistently increasing demand in the industry. The banking sectorhas a bilateral relation with the industrial expansion of the country as the former affects and alsogets affected by the dynamics in the latter (Moradi-Motlagh, Valadkhani and Saleh 2015). Thebanking sector of the country has remained as one of the primary stimulus to the economicgrowth of the country, as can be seen from its considerably high contribution to the GDP of thesame.
3BANKING AND FINANCEFigure 1: Sector-wise Real Gross Value-Added in Australia(Source: Australia.gov.au, 2018)As is evident from the above figure, the financial sector forms one of the primary sectorscontributing nearly 9.3% to the real cross value-added of the country, which makes it the largestsingle sector contributing to the same. The banking and financial sector of the countrycontributes around 140 billion dollars annually to the GDP of the country (Stewart, Robertsonand Heath 2013).