Economics for Business Australia PowerPoint Presentation 2022

Economics for
Business
Name of the Student
Name of the University
Course ID

Introduction
• Australia is mostly dominated by four major banks
• Commonwealth Bank of Australia, New Zealand Banking Group (ANZ),
Australia and Westpac Banking Corporation and National Australia Bank (NAB)
• There are few smaller banks throughout the country
• Australia is mostly centred with the four reputed banks
• Lack of competition in the major banks creates dead weight loss (Hargovan
2018)
• The Royal Commission into Misconduct in the Banking, Superannuation and
Financial Services Industry

Industry Background
• The financial structure of Australia has undergone great deal of
changes in the past two decades
• In Australia, the difference between investment and retail banks
has become immensely obscure
• Fraud in banking sector by CBA (Liu 2015)
• The chief executive of CBA apologised to the public
• Banks involved in money laundering
• Australia’s “oligopolistic banking system” channels

Market Structure
• Highly concentrated oligopoly market.
• The major big banks have created a cartel
• The shareholder’s work is to extract the maximum profit (Salim,
Arjomandi and Seufert 2016)
• Joining a cartel leads to an increase in market power
• High entry barriers to enter the industry.
• Banks are able to easily depart the fleeting of full cut in interest
rate to the borrowers