Notes On Banking And Finance Lawyers Essay
RBA is a statutory authority and it is Australia’s central banking. RBA’s key role is monetary policy. The RBA explains monetary policy as the process of setting the interest rate on overnight loans in the money market. This is known as the “cash rate”. RBA further explains that the cash rate influences other interest rates in the economy (including the money-market rates and the key rates of banks and financial intermediaries such as mortgage and business loan rates), and this affects the behaviour of borrowers and lenders, economic activity, and ultimately, the rate of inflation.
As mentioned, monetary policy sets the cash rate, and this in turn impacts on the behaviour of financial institutions, such as a bank’s lending behaviour. It is helpful for practitioners to have working knowledge of RBA’s role and powers to better understand clients’ goal and objectives and the basis for them.
Other than being a policy-making body, RBA’s other major responsibility include:
• the maintenance of financial system stability;
• the promotion of the safety and efficiency of the payments system, being arrangements that are designed to (among other things) enable consumers and businesses to transfer funds held in an account at a bank or a financial institution to one another.;
• overseeing Australia 's foreign exchange market;
• the management of Australia 's gold and foreign exchange reserves;
• the issuance of Australian currency…