Premium Essay

Bank Funding Composition in Australia

In: Business and Management

Submitted By cherryblossom
Words 2199
Pages 9
I. Introduction:
The confidence of banks is very important for the stability of financial system as a whole. However, similar to the situation of banks in other countries around the world, the influence of the global financial crisis (GFC) have increased difficulties in raising funds for banks in Australia. Such difficulties have forced Australian Banks to seek for a more stable source for their funding. This has then led to a change in structure of banks’ funding in Australia. This report will identify major components of banks’ funding with a concentrating on the change of banks’ funding composition. The report also include some predictions for the banks’ funding structure in the next two years under the assumption that the Reserve Bank of Australia has been successful in lowering interest rate to increase economic activities. II. Major components of banks’ funding:
In general, there are five major components of banks’ funding including deposits, wholesale funding sources with short-term and long-term wholesale securities debt, equity and securitization. Deposits, in 2012, account for almost 54% of total banks’ funding. Wholesale funding, which comprise short-term and long-term wholesale debt, constitutes further 40% of bank funding. Long-term debt securities are those issued with the term to maturity of more than a year while short-term securities have term to maturity of less than 12 months. The long-term and short-term debt markets can be divided further into either domestic or offshore debt markets. Within domestic debt market, short-term securities debt is mainly money market securities and long-term securities debt is mainly bonds (Hunt, 2011, p. 43). Additionally, offshore debts, which can be either in foreign currency or in Australian dollar, are foreign liabilities raised overseas. Two others components of banks’ funding are equity and…...

Similar Documents

Premium Essay

Funding a Small Business Venture

...Running Head: BUSNIESS AND FUNDING 1 Business and Funding American Intercontinental University BUSINESS AND FUNDING 2 Abstract When it comes to business there is always more to learn. This weeks paper will look at a couple very important terms having to do with business management; investment banker, stock market, financial management, and risk financing. The paper will take a brief look at the function and importance of each of these terms and how they apply to business. I will also discuss how I will fund my new business venture, and why I choose that way of funding. There are a variety of ways to fund a business including borrowing from friends and family or even seeking out investors. There is no right or wrong way to fund your business, just what way works best for you and your situation. BUSINESS AND FUNDING 3 Funding a Small Business Venture Previously I discussed the way in which I wanted to run my business. I chose to run my new small business as a sole proprietor. As a sole proprietor I will run my own business and be taxed at a personal income level, and I personally am liable for all business debt (The Ultimate Resource, 2009). I will give you a brief reminder of my situation, I am starting my own small business for a new product I invented, and I believe this product can be used for a wide range of applications. I am very......

Words: 1373 - Pages: 6

Free Essay

Composition

... GE217 Composition II Week 2 (B) Identifying logical Fallacies 1. Bandwagon Appeal: “Cash for Clunkers”; The New York Times, September 30, 2012 The argument on this article is about how the people think that something should to be done because the majority does it. The "Cash for Clunkers" program has been a success. By subsidizing the purchases of new, more fuel efficient vehicles for Americans willing to trade in their old gas guzzlers, this initiative makes a short-term investment in our long-term goals of environmental protection and decreasing our dependence on fossil fuels. 2. Ad Hominem: The education for women; Richard Norquist; This is an article from the year 1917 were women are not suppose to know everything like men, he’s argument and appeal that women should have the right to go be equal to men in terms of education. 3. Begging the question: “Murder is morally wrong, Therefore, abortion is morally wrong”;Hurley P. ; About.com The argument presumes the truth of a premise that isn’t stated, namely that abortion is murder. As this premise is far from obvious, and the arguer doesn’t even mention it (much less give it a defense), the argument begs the question. 4. Red Herring: Consequences of using Nuclear Power; Dean Babst and David Krieger; 1997 Here the arguer does nothing to address the issue of the dangers of nuclear power, but instead changes the subject to the danger of electricity. If there’s even an argument at all here, it certainly has nothing......

Words: 432 - Pages: 2

Premium Essay

Banking Features of Australia and Canada

...financial industry, and no emerge of any banks that are on the verge of bankruptcy or need government rescue. In this paper, in order to retrospect the intrinsic reasons, I will firstly explore the common features of the banking systems in Australia and Canada. Then I will compare their banking systems in structure and regulation with United States. Finally, the different ways mortgage lending is conducted in these three countries will be emphasized. Common features The common features of the banking systems of Australia and Canada are embodied in the high concentrated banking system along with intensive supervision and sound regulation. It is the common features that contribute to the resilient performance in these two countries’ banks through the global financial crisis. Generally speaking, the whole banking sector in either Canada or Australia is monopolized by a few large-scaled national banks. In Australia, there are mainly four banks, Commonwealth Bank, Westpac Banking Corporation, Australia and New Zealand Banking Group and National Australia Bank, which dominate Australian banking market. They are individually and collectively huge compared with the size of banking system and their total assets are vast compared with GDP. These four banks occupy 75% of the total banking assets and 80% of the residential mortgage market (Jang & Sheridan 2012, p3). Also, due to there are no mergers and acquisitions between top four banks, the major financial institutions......

Words: 3294 - Pages: 14

Premium Essay

Australia

...Australia’s Dynamic Water Industry Fostering excellence in water management About this publication Australia has a unique water challenge. Increasing variability in extreme climate conditions has required governments, industry and citizens to prioritise water management. This focus has led to distinctive approaches, changes in governance, behavioural change and technology innovation. Australia’s experience and approach to addressing water management challenges is regarded as among the most progressive in the world. This publication has been prepared by the Australian Water Association, with the support of the Australian Trade Commission (Austrade), the Department of Innovation, Industry, Science and Research (DIISR ), waterAUSTR ALI A and industry partners to illustrate some of the innovative solutions developed by Australian business and research groups that have built resilience to water management by urban, agricultural and industrial sectors across Australia. June 2011 (10-11-92) Disclaimer This publication has been prepared as a general overview. It is not intended to provide an exhaustive coverage of water innovation in Australia. The information is made available on the understanding that the Australian Trade Commission (Austrade), the Department of Innovation, Industry, Science and Research and the Australian Water Association (the parties) are not providing professional advice. Therefore, while all care has been taken in the preparation of the......

Words: 12698 - Pages: 51

Free Essay

Risk Compared with Australia Banks and Hsbc

...The recent global financial crisis caused numerous serious problems around the world. Many countries like the United States, Spain and Greece suffered very heavy strikes during this financial crisis. The Australian banking system is no exception, has been impacted. Some financial institutions grasp this crisis into good opportunities, however other commercial banks are exposed to big challenge and face many risks like credit and liquidity risk. Given this situation, APRA outlines the regulations to ensure and consolidate the safety for Australian banking system, such as Liquidity and Credit quality. This report will analyse the difference between credit risk and liquidity risk at the beginning, then the regulations from APRA in terms of credit risk for the major and smaller banks will be discussed. Next, there will be 3 ratios of credit risk of the “big four” contrast to a major commercial bank in the UK. This report will be end with evaluating the credit risk of 5 major banks and give some findings are regarding with the credit risk of 5 banks. 1. Explain the difference between credit risk and liquidity risk for a bank. 1.1 Credit risk Credit risk is the risk that the promised cash flows from loans and securities held by FIs may not be paid in full (Lange & Saunders, 2013). Normally, all financial institutions have probability to face this risk. However, if borrowed principal is paid on maturity and interest payments are paid on the due date, FIs can eliminate......

Words: 2315 - Pages: 10

Premium Essay

Bank

...recommended the phasing out of the directed credit programme at 10 per cent of the bank credit not only the proportion has been retained at 40% level but its coverage has been considerably enlarged. The appropriate instrument to achieve distributive justice is fiscal policy not credit policy. Fiscal policy ensures the scrutiny of budget provision at various levels. Efficiency and economy in the spending of public money are ensured by the different agencies of financial control which include the legislature, the Estimates Committee and the Public Accounts Committee. The audit of the government expenditure prescribed by the Constitution is to be undertaken by the Comptroller and Auditor General. All these agencies of control direct their control or review towards ensuring that money is available for the purpose for which it is spent, that the manner of expenditure conforms to the manner prescribed by the legislature and full value is obtained for the money spent. Further, the expenditure is either tax financed (with no quid pro quo) or by borrowing (revenue expenditure included in fiscal deficit) with inflationary consequences. While the inflationary impact of expenditure financed either by credit or budget is common, there are no checks constitutional or otherwise in the end use of funds in the case of credit. Directed credit in the name of social banking is extended out of deposits made by public in trust with banks. While the Banking Regulation Act (BRA) (viii) does......

Words: 132665 - Pages: 531

Premium Essay

Composition

...support. My enormous respect for his work rests purely on its merits. The Big Leap As readers of business books well know, management gurus come and go with alarming frequency. Why, then, does Porter’s work endure? What makes this work so different and so important? Porter’s is the rare intellect that successfully bridges the divide between economic theory and business practice. In the oft-told joke, one economist says to another, “Sure, it works in reality. But will it work in theory?” Porter’s work endures—and is so widely cited and used—because it works in both realms, theory and practice. Bridging the divide is an apt metaphor for Porter’s career. Picture this scene. The Harvard Business School (HBS) sits majestically along the banks of the Charles River, on the Boston side. Harvard University’s vaunted economics department is housed “across the river,” on the more traditionally intellectual Cambridge side. Crossing the river takes just a few minutes by footbridge. But as a young graduate student in the early 1970s, first earning an MBA on one side of the river and then a PhD on the other, Michael Porter confronted a seemingly impassable intellectual divide. To put it bluntly, neither side had much use for the other. Looking back, here’s how he describes it: “The HBS research tradition saw the enterprise as an incredible complex entity. Thousands of things mattered. Every situation is unique, because it consists of different individuals, different markets, different......

Words: 59071 - Pages: 237

Premium Essay

Funding

...1 FUNDING A BUSINESS FUNDING A BUSINESS Christopher Roberts American Intercontinental University 2 ABSTRACT The Inventor has best found that sole proprietorship works best for him. Now, he has to face which option for funding will be best for him and his business. He will research three options: borrow money, sell stocks or license the technology. He will view different aspects of business financing and research a few different tools that are needed: stock market, financial management and investment banking. He will learn the meaning, function and the importance of each of them. Furthermore upon conducting all research and weighing all options of the three choices, he will have come to the conclusion that borrowing money will best suit him and his business needs. 3 Funding a Business An investment banker is a representative of a bank or financial firm whose job is to raise capital for corporations, boroughs, communities, cities, town and districts to just name a few. A few responsibilities of an investment banker are to organize and negotiate large financial transactions. They also take role of advisor to company clients and introduce beneficial financial ventures for their own firm. When a company goes public an investment banker will assist in creating value for an I.P.O., initial public offering. The purpose of the stock market is to give firms a public forum where they can sell off portions of their company to raise capital. These portions of the......

Words: 831 - Pages: 4

Premium Essay

Australia

...Land and Climate Area (sq. mi.): 2,988,902 Area (sq. km.): 7,741,220 Australia is the sixth largest country in the world. It is just smaller than Brazil and about four-and-a-half times the size of the U.S. state of Alaska. Australia is the only country that occupies a complete continent. It is also the driest inhabited continent in the world. About one-third of its land is desert and another third is composed of poor-quality land. A long chain of mountains, the Great Dividing Range, runs along the Pacific coast. Fertile farmland lies east of the Great Dividing Range, in the southwestern corner of Western Australia, and in the island state of Tasmania. Cattle stations (ranches) reach the edge of the barren interior desert. The famed Australian Outback is an undefined region that encompasses all remote, undeveloped areas. The Outback is seen as a mystical heartland or frontier—a symbol of Australia's strength and independence—where the climate is hot, life is hard, and people are tough, independent, and few. CultureGramsTMWorld Edition 2015 | Commonwealth of Australia | BACKGROUND include the emu, cockatoo, and kookaburra. Australia's snakes are among the most venomous in the world. BACKGROUND include the emu, cockatoo, and kookaburra. Australia's snakes are among the most venomous in the world. Among Australia's natural wonders is the Great Barrier Reef, a system of coral reefs that extends more than 1,250 miles (2,000 kilometers) near Australia's northeast......

Words: 6375 - Pages: 26

Free Essay

Composition

...Suddenly an idea struck in my mind and soon we decided to go on a journey by boat. A day was fixed for the journey. The river was not too far. On the fixed day we took our bags and some things to eat and started for the river bank on foot. As we had already hired a boat, we found it ready. The boat was small but it was beautifully decorated. There were two boat-men who instructed us to set properly on both the sides of the boat. It was morning and the sky was clear. A fine cool breeze was blowing. As soon as we took our seats in the boat, it began to move on water. They were really thrilling movements in our life. We all were in high spirit. The' boat was moving gently. The river water was shining in the rays of the sun and was presenting a beautiful scene. It looked white like silver. There were many more boats of different shapes and sizes sailing in the river. There were men, women and children in those boats. The children were very excited and were shouting with joy. All of a sudden the cool breeze stopped blowing and we felt a bit hot. One of my cousins suggested enjoying cold drink which we had brought in our bag. Soon it was midday and we decided to take our lunch. Up to this time we were on the other side of the river. The boatmen tied the boat to the bank and guided us to a restaurant. We took our meals. We enjoyed tea too. Then we started our return journey. The return journey was little bit difficult because the boat was going against the current. Naturally the......

Words: 1050 - Pages: 5

Premium Essay

Anz Bank

...2014 ANNUAL REPORT Australia and New Zealand Banking Group Limited ABN 11 005 357 522 This Annual Report (Report) has been prepared for Australia and New Zealand Banking Group Limited (“the Company”) together with its subsidiaries which are variously described as: ”ANZ”, “Group”, “ANZ Group”, “the Bank”, “us”, “we” or “our”. ANZ ANNUAL REPORT 2014 ANZ IS EXECUTING A FOCUSED STRATEGY TO BUILD THE BEST CONNECTED, MOST RESPECTED BANK ACROSS THE ASIA PACIFIC REGION WHO WE ARE AND HOW WE OPERATE ANZ’s history of expansion and growth stretches over 175 years. We have a strong franchise in Retail, Commercial and Institutional banking in our home markets of Australia and New Zealand and we have been operating in Asia Pacific for more than 30 years. Today, ANZ operates in 33 countries globally. We are the third largest bank in Australia, the largest banking group in New Zealand and the Pacific, and among the top 20 banks in the world. ANZ is building the best connected, most respected bank across the Asia Pacific region. The strategy has three key elements – strong domestic markets, profitable Asian growth and an enterprise wide approach to operations and technology. Our strategy is based on the belief that the future of our home markets of Australia and New Zealand are increasingly linked to the fast growing region of Asia through trade, capital and wealth flows. We also believe that people want a bank that understands their specific needs,......

Words: 142091 - Pages: 569

Premium Essay

Australia

...Australia. Plan. 1. Australia explained in brief 2. States and territories 3. Sistem of governement 1. Australian democracy 2. The constitution 3. The federal government and Parliament 4. State and local government 5. The judiciary 4. The wildlife and conservation 1. Wuldlife 2. Nature conservation 3. Regreening Australia 4. Education 5. International links 5. Cultural growth 1. The australia council 2. Aboriginal arts 6. Australia today 1. AUSTRALIA EXPLAINED IN BRIEF. Australia is an independent Western democracy with a population of more than 17.6 million. It is one of the world’s most urbanised countries, with about 70 per cent of the population living in the 10 largest cities. Most of the population is concentrated along the eastern seaboard and the south-eastern corner of the continent. Australia’s lifestyle reflects its mainly Western origins, but Australia is also a multicultural society which has been enriched by nearly five million settlers from almost 200 nations. Four out of 10 Australians are migrants or the first-generation children of migrants, half of them from non-English speaking backgrounds. In 1991-92, East Asia contributed 41 per cent of settler arrivals. Aboriginal and Torres Strait Islander people totalled 265 378 at the last census, nearly 1.5 per cent of the population. Two thirds of the indigenous people live in towns and cities. Many others live in rural and remote areas, and some still have a......

Words: 5310 - Pages: 22

Premium Essay

Fins Bank

...groups: – Banks, and – Non-bank depository institutions. • We focus on the major characteristics of each group: – Size, structure and composition of industry group, – Balance sheets and recent trends, – Regulation. • In Australia, the Australian Prudential Regulation Authority (APRA) authorises financial institutions to carry out financial intermediation. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Institutions Management 2e, by Lange, Saunders, Anderson ,Thomson and Cornett Slides prepared by Maike Sundmacher 1-2 Products Sold by the Financial Services Industry • Comparing the products of DIs in 1950 and 2006: – Much greater distinction between types of DIs in terms of products in 1950 than in 2006. – Blurring of product lines and services over time. – Wider array of services offered by all DI types. – Refer to Tables 1.1A and 1.1B in the text. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Institutions Management 2e, by Lange, Saunders, Anderson ,Thomson and Cornett Slides prepared by Maike Sundmacher 1-3 Banks • Banks are the largest depository institutions in terms of size. • Major difference between banks and credit unions/savings institutions: banks have more varied assets and liabilities. • Differences in operating characteristics and profitability across size classes – for instance, with regards to the size of the commercial loan portfolio. Copyright  2007 McGraw-Hill......

Words: 2435 - Pages: 10

Premium Essay

Composition

...Composition 1.1 Felipe Viveiros de Moura PAT 201 1. “Creaking Door” a. Where and when: This creaking door was recorded on Wednesday, 13th of January in my house located in South State Street. b. Interest and influence: Having lived in this house for about 5 months, the creaking of my door every time I leave my room has become a sound that is part of my daily routine. After listening to all my recordings and selecting the top 8, this was one of the ones that, I believe, captured exactly what I was looking for. c. Techniques: Mic of the recorder was placed very close to the axis of rotation of the door d. Success in capturing sound: For a couple of tries, I could not capture the sound as loud as I intended to. After changing position, recording from inside the room and increasing the recording level, I was able to get the results I wanted. Background sound from my roommates was another difficulty but recording from inside the room helped solve the problem. 2. “Flush” e. Where and when: The flush of a toilet was recorded on Wednesday, 13th of January in my house located in South State Street. f. Interest and influence: Although this is a sound that everyone listens to every day, it does not receive the appreciation that it deserves due to its bad association. g. Techniques: recorder was placed perpendicular to the toilet centered in the drainage, to avoid the sound being too loud I made sure to place the recorder......

Words: 1157 - Pages: 5

Free Essay

Source of Funding

...Funding is the act of providing resources, usually in form of money (financing), or other values such as effort or time (sweat equity), for a project, a person, a business or any other private or public institutions. The process of soliciting and gathering fund is known as fundraising. Sources of funding include credit, donations, grants, savings, subsidies, taxes, Fundings such as donations, subsidies and grants that have no direct requirement for return of investment are described as "soft funding" or "crowd funding". Funding that facilitates the exchange of equity ownership in a company for capital investment via an online funding portal as per the Jumpstart Our Business Startups Act (alternately, the "JOBS Act of 2012") (U.S.) is known as "hyper funding". Funds can be allocated for either short-term or long-term purposes. Types of funds Grants are made to non-profit organizations by development assistance agencies and foundations. Usually grants do not have to be repaid. Grant money is available to enhance country institutional capacity, to support governmental and non-governmental institutions and to finance project formulation, policy reform and sector management and development. Grants are provided by bilateral donors, multilateral grant aid institutions, United Nations organizations and specialized agencies, international financing institutions, international non-governmental organizations, the private sector, foundations and charity organizations. Loans,......

Words: 2832 - Pages: 12