MBA Assignment Report PDF 2022

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MBA ASSIGNMENT

Contents
Introduction............................................................................................................... 3
Banking industry......................................................................................................... 3
Market structure of the banking industry...........................................................................5
Examination of issue regarding the industry on Australian economy.........................................8
Examination of ethical issue....................................................................................... 8
Evaluation of unnecessary fluctuation in interest rates of houses...........................................8
Relevant application of market demand and market supply.....................................................9
Government policies that intervene in market and finally stabilise them...................................11
Conclusion.............................................................................................................. 12
References.............................................................................................................. 13

Introduction
The report brings out a discussion on recent royal commission leading to misconduct in the
banking sector, financial services industry, and superannuation. This report continues
background of Australian banking industry with elaboration of major issues as given below
with how they can be resolved through government policies and law compliance.
Misconducting and the consumer abuse is quite prominent, chronic, long standing, and
profound (Reserve Bank of Australia, 2018). The authorities of royal commission is being
heard as CBA top manager as they have the power to negotiate with issues related to media
release rather than undertaking the case under court enforceable after selling bank`s super
accounts. At last, there is an analysis of affecting issue in regards to the industry on the
economy of Australia. This discussion will carry out a discussion on aggregate demand and
aggregate supply model and its relativity with the banking industry (Reserve Bank of
Australia, 2018).
Banking industry
Banking in Australia is ruled by four main banks named as Westpac banking corporation,
New Zealand banking group, Commonwealth bank of Australia and National Australian
Bank (Reserve Bank of Australia, 2019). Although, there are several banks in the country
with the large number of financial institutional including credit unions, creating societies,
mutual banks that can finally provide banking type services as being described as the deposit
taking institutions. The central bank of Australia is named as “reserve bank of Australia.”
(Cummings, and Wright, 2016).
Several greater banks have their presence where few have retail banking presence. Banks of
Australian government has guaranteed deposits nearly to $250000 per customers against the
banking failures. Under the Banking Act, 1959, it is seen that a licence has to operate through

operations in Australia and the Australian foreign corporate bank (Reserve Bank of Australia,
2019). It should comply with religious charitable development banking funds that are exempt
from the requirement of licence. For the last ten years, commonwealth bank is ranked at first
in terms of Bloomberg return riskless with a risk adjustment of 18 percent. These four major
banks hold world`s largest market capitalisation with rank of 25 for the safe banks
(Cummings, and Wright, 2016). The banking sector of Australia is its largest Australian
financial system. It can comprise of 147 authorities for the deposit taking institution that can
collectively hold nearly 55 percent of the assets of the AFI (Australian financial institutions).
History of banking has begun with the prototype banks that are related to merchants of world,
which has made grain loans to the farmers and the traders that carry goods between the cities.
The Australian market comprises of five ADIs and its five component, which can make
ASX20 amongst 20 largest stocks within the market capitalisation. ADIs can make nearly 44
percent of the total market capitalisation (Reserve Bank of Australia, 2019). The chart shows
the appropriate market capitalisation for the 10 years with financial companies that could
undertake finance, investment banking, asset management, corporate lending, financial
investment, and insurance by excluding Australian real estate trusting investments.
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100
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300
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100
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Jan-2008 Jan-2010 Jan-2012 Jan-2014 Jan-2016 Jan-2018
S&P/ASX200 Financial-x-A-REIT (total return) S&P/ASX 200 (total return)
Index (31 Jan 2018=100) Index (31 Jan 2018=100)
(Source: Alhassan, Addisson, and Asamoah, 2015)