Australia

Overview

Official name : Commonwealth of Australia

Government : Federal democracy, 6 states

Head of State : Queen Elizabeth II, represented in Australia by a governor- general, currently Michael Jeffery, sworn in on August 11th 2003

Capital City : Canberra

Main towns : Sydney , Melbourne , Brisbane , Perth , Adelaide

Land area : 7,682,400 sq km

Population : 24.99m (2018 est.)

Climate : Temperate in the south; subtropical or tropical in the north; hot and dry inland. Weather in Canberra (altitude 560 meters): Hottest months, January and February, 13-28 C; coldest month, July, 0-11 C (average daily minimum and maximum); driest month, June, 37 mm average rainfall; wettest month, October, 69 mm average rainfall

Currency : Australian Dollar (ISO currency code: AUD)

Exchange rate : USD 1=AUD 1.40 (August 2020)

Measures : Metric system

Language : English

Time : Hours ahead of GMT (summer time in brackets): New South Wales , Tasmania , Victoria & the Australian Capital Territory 10 (11); Queensland 10; Northern Territory 9.5; South Australia 9.5 (10.5); Western Australia 8

Regulatory Scheme

The Reserve Bank, The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investment Council (ASIC) are the primary regulatory bodies in Australia . The Reserve Bank of Australia carries out the normal functions of a central bank. It has responsibility for monetary policy, the overall stability of the financial system and regulation of the payments system. The Reserve Bank sets a cash rate target (the overnight money-market interest rate), leaving banks and other financial institutions to adjust market rates. The Australian Prudential Regulation Authority (APRA) supervises deposit-taking institutions, life and general insurance providers, and superannuation funds. The Australian Securities and Investment Commission (ASIC) deals with overall capital market integrity, consumer protection and competition. A council of financial regulators, made up of these three bodies, handles operational and policy co-ordination. Deposit insurance is not available, nor does the regulatory system provide guarantees for deposits. Almost any company can offer financial products to its customers, provided that it can fulfil the Reserve Bank's prudential guidelines.

Banking

The Australian banking industry is currently comprised of the Reserve Bank of Australia and around 50 major banks. Of the 50 major banks in Australia , a little more than half are foreign owned. Under the Banking Act of 1959 foreign banks (unlike the domestic banks) are not subject to the Australian depositor provisions. Foreign banks in Australia can apply or an Australian banking authority either as a subsidiary or as a branch. Since 1998, the APRA has been delegated authority to supervise Australian banks. The Reserve Bank Act of 1959 established the Reserve Bank of Australia as the central bank. Since 1 July 1998 the Reserve Bank has been in charge of monetary policy and the maintenance of monetary stability, as well as the Australian payments system. Australia 's five largest banks account for more than half of the total retail branch network throughout Australia . In recent years federal and state governments have pursued the privatization of their assets in the banking industry. The federal government sold its remaining 50.4% holding in the Commonwealth Bank in mid-1996. State governments sold the Bank of South Australia , the Bank of Western Australia, the Trust Bank ( Tasmania ) and the Bank of Queensland.

Stock Exchange

The Australian Stock Exchange Limited (ASX) was formed in 1987 by joining six independent stock exchanges that formerly operated in the state capital cities. In 1998, the ASX became a listed company, which required legislation of the Australian parliament. ASX operates Australia 's primary national stock exchange for equities, derivatives and fixed interest securities. The ASX remains one of Asia 's largest indexes and it is generally thought to have good transparency, liquidity, and settlement systems.

Insurance

The Australian insurance market is regulated by two main bodies, the Australian Prudential Regulation Authority ("APRA") and the Australian Securities and Investments Commission ("ASIC"). As of June 2002 there were around 153 private insurers and 15 public insurers operating in Australia . In March 2002, the Financial Services Reform Act was introduced. The Act brought a uniform licensing scheme to all financial service providers. The tightening of regulation for general insurers, enforced in July 2002 increased regulatory capital requirement by an average 50%. The re-authorization and new requirements on general insurers in 2002 alone led 16 companies to exit the market and an additional 10 having their licenses revoked. Foreign investment is encouraged, but acquisition of more than 15% of an Australian owned entity with assets in excess of A$5m is subject to approval from the FIRB. Compulsory insurance in Australia includes workers' compensation, third party motor accident personal injury, aviation passenger liability and insurance brokers' professional indemnity. The fastest growth has been seen in the superannuation (pension) business, a trend which is expected to continue.