... as banks) and regulatory authorities, the Reserve Bank (the central bank) and the Australian Prudential Regulation Authority. The second consists of financial markets (e.g. the bond market) and their participants (issuers such as governments, and investors such as superannuation funds). The third is the payments system - that is, the cash, cheque and electronic means by which payments are effected - and its participants (e.g. banks). The interaction of these components enables funds for investment or consumption to be made available from savings in other parts of the national or international economy. (www.abs.gov.au) Evolution of Australian Financial System: The Reserve Bank of Australia began its operations in January 1960. At that time Banks and life offices dominated the Australian banking system with these institutions having control over four-fifths of total assets. Major sectors of the existing financial system, including trusts, merchant banks, and credit unions, were sprouting. In the security ...

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