Comprehensive Analysis of the Australian Banking Sector for HI5003

This report provides a detailed analysis of the Australian banking sector, focusing on its market structure, key players, and regulatory bodies. The report examines the oligopolistic nature of the market, highlighting the dominance of the four major banks. It discusses the role of the Reserve Bank of Australia (RBA) in maintaining financial stability, controlling inflation, and managing interest and exchange rates. Additionally, the report addresses the Australian Securities and Exchange Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) and their functions. The report also covers the Royal Commission's impact on the banking sector, aiming to restore public trust. Overall, the report provides a comprehensive overview of the Australian banking landscape, including competition, market concentration, and regulatory oversight.

BANKING SECTOR IN
AUSTRALIA

FUNCTIONS OF A BANK.

 Common wealth bank of Australia
 Westpac Banking Corporation
 Australia and New Zealand Banking Group
(ANZ)
 National Australian Bank (NAB)
FOUR MAJOR BANKS OF
AUSTRALIA

 Reserve Bank of Australia (RBA)
 Australian Securities and Exchange
Commission (ASIC)
 Australian Prudential Regulation Authority
(APRA)
REGULATORS OF THE
BANKING SECTOR

 It strives to maintain low and stable rate of
inflation.
 It aims to achieve stable and high
employment rate in the economy.
 It promotes stability in financial markets.
 It aims to maintain interest rates and
stability in the exchange rates.
OBJECTIVES OF CENTRAL BANK

MARKET STRUCTURE
•Australian banking sector has a oligopoly
competition.
•There are few major banks that are
present in Australia.
•Entry or Exit in this type of market
structure is difficult.
•The products or services that are sold are
differentiated and homogenous.

CARTEL
ARRANGEMENT
•This arrangement comprises of four
major banks of Australia.
•Creates a high barrier to entry and
exit.
•Encourages competition without
incurring high costs and bearing
minimum risks.

Market Concentration
•Market concentration can be measured
using Herfindahl Hirschman Index.
•Australian Banking sector is highly
concentrated.
•The market concentration has an affect on
profitability, economic efficiency and
financial stability.

 It was established on 14th December, 2017.
 It is also known as Banking Royal
Commission and the Hayne Royal
Commission.
 This body looks after matters which relate
to government structure, minority
treatment, resolve public concerns etc.
 It has been established to restore the trust
of people in financial institutions.
Royal Commission

Thank you.