total 1800 words on each part within 4 hours.

FIN20013 Banking Operations and Governance Assignment 1

Study Period 3 2016 Instructions

NOTE: THIS ASSIGNMENT IS DUE ON 25th September 2016 at 10:45pm

1. This assignment is to be completed individually.

2. Please upload a copy of your assignment to Blackboard. The due date for this assignment is

Sunday September 25th 2016 at 10.45pm. Students should make themselves aware of the

Extensions Policy and Late Penalties Policy, which can be found in the FIN20013 Banking

Operations and Governance Unit Outline. ** REQUEST FOR EXTENSION ON OR ONE DAY

BEFORE DUE DATE WILL NOT BE ENTERTAINED **.

3. Assignment submissions must include an Assignment Coversheet which is available on the

Blackboard website. Any submissions without the coversheet will be marked as zero (0).

F I N 2 0 0 1 3 A s s i g n m e n t 1 S t u d y P e r i o d 3 2 0 1 6 Page 2

Question. Please answer each part in separately, in essay form addressing the questions.

PART A -- word limit : 700 words 1. What do you understand about shadow banking? Name one example of an institution in

Australia which fall into this category. 2. What are some of the arguments that the activities of these institutions should be monitored by

regulators? 3. Do you agree that these institutions should be regulated?

(6 marks)

PART B -- word limit : 700 words During the recent months we witnessed many financial institutions suffered significant losses in their market value. There are views who argue the failure of a particular company/industry such as bank would be detriment to the overall wellbeing of the economy. There are also views that banks should be allowed to fail. Required: 1. List two arguments which support the view banks should be allowed to fail. 2. List two arguments which support the view banks should not be allowed to fail. 3. (current issue) What are some of the potential explanations (list 2) why the major banks only

passed part of the rate cut after the Reserve Bank of Australia cut the overnight rate to 1.75% on 2nd of August.1

(7 marks)

PART C-- word limit : 700 words 1. What do you understand about the concept of net regulatory burden? 2. Why should the government put in so much effort in regulating and monitoring the activities of

the financial institutions?

(7 marks)

1 http://www.abc.net.au/news/2016-08-02/reserve-bank-cuts-interest-rates/7682170