Economics for Business Report 2022

ECONOMICS FOR BUSINESS

Contents
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................4
INDUSTRY BACKGROUND- BANKING SECTOR...................................................................5
MARKET STRUCTURE OF THE INDUSTRY............................................................................7
MARKET CONCENTRATION AND ITS IMPACTS..................................................................8
ROYAL BANKING COMMISSION............................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES:.............................................................................................................................13

EXECUTIVE SUMMARY
This report provides a brief background of the banking sector in Australia. It will also give an
idea about the market structure and market concentration of the industry along with its impacts.
The recent Royal Commission into misconduct in the banking and finance industry has been
discussed. This report has been prepared for creating an in depth knowledge about the various
banks that are present in Australia and also the various services provided by them.

INTRODUCTION
Banking industry is considered very important component of an economy because it satisfies the
personal and business needs of an individual. Banks act as an intermediary between the person
who has surplus funds and the people requiring it. It also provides service to people who are
encourages saving for a better future. These financial activities that are performed by banks help
in economic growth and development. It helps in mitigating the risk between different regions,
industries, countries, companies as well as individual project.
In the recent times, the Australian banking sector has shown a rapid progress in deregulation as
well as privatisation. The foreign banks are free to enter in the financial market and provide
financial services. The retail banks are engaged in providing huge number of financial services
that includes stock broking, life or general insurance, providing loans and underwriting which is
provided to the retail consumers. These services that are provided by retail banks have become a
threat to the brokerage houses and the merchant banks (Alex, 2012).
This report will help us to gain knowledge about the background of banking sector in Australia
and the market structure. The market concentration and its impact will also be discussed which
will be a value addition. The government of Australia has given permission to the non-
Australian banks for serving the wholesale market of the country. Based on the banking
regulations, the locally set up subsidiary is the only body allowed to carry out the retail banking
activities.
It is expected that the banking sector of Australia will experience some major changes. The entry
of new financial institutions into the banking industry has brought many new innovations in
relation to payment methods, lending products and few other common banking activities that has
caused a threat for the traditional banking relationship (Berman, Knight, & Case, 2013).