Banking and Finance Law

RUNNING HEAD: Banking and Finance Law
Banking and Finance Law

Banking and Finance Law 1
Contents
Answer 1..........................................................................................................................................2
Answer 2..........................................................................................................................................2
Answer 3..........................................................................................................................................3
Answer 4..........................................................................................................................................4
Answer 5..........................................................................................................................................6
References........................................................................................................................................8

Banking and Finance Law 2
Answer 1- Overview of the Legislation governing Banking and Financial Services Industry and
Role of Regulators-
The banking industry in Australia is governed by the Banking Act 1959 and the financial
services industry is governed by Corporations Act 2001. Such legislation regulates the business
of banking by providing a legal framework. Such legislation results in the involvement of banks
in the payment systems of Australia. The regulators such as ASIC, APRA and RBA play an
important role in the banking sector. ASIC is responsible for consumer protection and market
integrity and is also concerned with the regulation of finance companies and investment banks.
APRA bears the responsibility for the prudential supervision and licensing of Authorized
Deposit- taking Institutions (ADIs), superannuation funds and general insurance companies1. On
the other hand, RBA is responsible for the performance of central banking functions including
monitory policy and payment systems.
Effectiveness of Regulators in the Royal Commission into the Banking Sector-
Such legislation and the role of ASIC, APRA and RBA have proved to be of great importance
given the recent events in the Royal Commission into the Banking Sector. ASIC or APRA have
the power to conduct investigation, examine people on oath and require the production of
documents. Under the Banking Act 1959, they had power to take action against the bad behavior
of the banks. However, in the recent events such as billing the customers after their deaths for
ongoing services by subsidiary of the Commonwealth bank, ASIC proved to be a hesitant and
timid regulator which quickly accepted the assurances of regulated bodies2.
Answer 2- Relationship between Bank and Customer-
There is a contractual relationship between the bank and customer. A variety of services are
offered by a bank to the customers and therefore, the relationship between the customers and
1 Michael Adams, Grace Borsellino, James McCalman, and Angus Young. "Australia’s proposed Banking
Executive Accountability Regime: regulatory panopticon or fail-safe?." Governance Directions 9 (2017):
529.
2 Andrew Clarke. "'Culture'and its place in the corporate governance puzzle." Governance Directions 70,
no. 1 (2018): 10.