List of banks in Australia

 

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The Reserve Bank of Australia, Website www.rba.gov.au a government agency, came into being on 14 January 1960 as Australia's central bank and banknote issuing authority, when the Reserve Bank Act 1959 removed the central banking functions from the Commonwealth Bank.

The Bank has the responsibility of providing services to the Government of Australia in addition to also providing services to other central banks and official institutions. It currently consists of the Payments System Board, which governs the payments system policy of the Bank, and the Reserve Bank Board, which governs all other monetary and banking policies of the bank.

Both Boards consist of members of both the Bank, the Treasury, other Australian government agencies, and leaders of other institutions that are part of the economy. The structure of the Reserve Bank Board has remained consistent ever since 1951, with the exception of the change in the number of members of the Board. The Governor of the Reserve Bank of Australia is appointed by the Treasurer and chairs both the Payment Systems and Reserve Bank Boards and when there are disagreements between both Boards, the Governor resolves them.

From the middle of the 19th century into the 1890s, the prospects of a national bank forming grew. In 1911, the Commonwealth Bank was established, but did not have the authority to print notes, which was a power that was still reserved to the Treasury. A movement toward reestablishing the gold standard occurred after World War I, with John Garvan leading various boards in contracting the money supply on the route to doing so, and the gold standard was instituted for both the British pound sterling and the Australian pound in 1925.

During the Great Depression, the Australian pound became devalued, no longer worth the pound sterling, and formally departed from the gold standard with the Commonwealth Bank Act of 1932. Legislation in 1945 led to regulation of private banks which H.C. Coombs was opposed to and when he became Governor in 1949, he gave them more overall control over their institutions. When the monetary authorities implemented the advice of Coombs to have a flexible interest rate, it allowed the Bank to rely more on open market operations.

The float of the Australian dollar happened in 1983, around the same period of time that the financial system in Australia was deregulated. Administration of the banks was transferred in 1998 from the Bank to the Australian Prudential Regulation Authority and the Payments System Board was created, while the Bank was given power within the said Board in the same year. The current Governor of the Reserve Bank is Glenn Stevens, who has been the incumbent since 18 September 2006


Headquarters Sydney, New South Wales, Australia
Coordinates 3352′05″S 15112′42″E / 33.868086S 151.211749E / -33.868086; 151.211749Coordinates: 3352′05″S 15112′42″E / 33.868086S 151.211749E / -33.868086; 151.211749
Established 1960
Governor Glenn Stevens
Central bank of Australia
Currency Australian dollar
ISO 4217 Code AUD
Base borrowing rate 3.50%[1]
Website www.rba.gov.au
 

The Reserve Bank of Australia is Australia's central bank. Its duty is to contribute to the maintenance of price stability, full employment, and the economic prosperity and welfare of the Australian people. It does this by setting the cash rate to meet a medium-term inflation target, working to maintain a strong financial system and efficient payments system, and issuing the nation's banknotes. The Bank provides selected banking services to the Australian Government and its agencies, and to a number of overseas central banks and official institutions. Additionally, it manages Australia's gold and foreign exchange reserves.

 

A Brief History
In 1911, legislation established the Commonwealth Bank of Australia. In 1959, this original body corporate was preserved as the Reserve Bank of Australia (RBA) in legislation, specifically to carry on the central banking functions; at that same time, the commercial and savings banking functions were transferred into a new institution, which carried on the old name of Commonwealth Bank of Australia.

With the Federation of the Australian States into the Commonwealth of Australia, the Australian Parliament assumed power to make laws with respect to banking and currency. In 1911, the first Commonwealth Bank Act gave the Bank only the ordinary functions of commercial and savings banking; the Bank did not specifically have a central banking remit and it was not responsible for the note issue. Management of the Bank was vested in the Governor. The Bank opened for business in mid 1912. At that time, the note issue was administered by the Australian Department of the Treasury, which had taken it over from the private trading banks and the Queensland Government.

In 1920, responsibility for the note issue was transferred from the Treasury to a Notes Board (consisting of four members, appointed by the Government). The Governor of the Bank was ex officio a member of the Notes Board. The administration of the note issue was undertaken by the Bank, though the Bank and the Notes Board were formally independent of each other.

In 1924, the Commonwealth Bank Act was amended and the Bank was given control over the note issue. Management was then vested in a board of eight directors, including ex officio the Governor and the Secretary to the Treasury. From this time until 1945 (when there were major changes to the legislation), the Bank gradually evolved its central banking activities, initially in response to the pressures of the Depression in the early 1930s and later by formal, albeit temporary, expansion of its powers under wartime regulations. These included exchange control and a wide range of controls over the banking system (including authority to determine advance policy and interest rates, and to require private banks to lodge funds with it in special accounts).

The new Commonwealth Bank Act and the Banking Act, both of 1945, formalised the Bank's powers in relation to the administration of monetary and banking policy, and exchange control. Under the 1945 legislation, there ceased to be a board, which was replaced by an advisory council of six, comprising entirely officials from the Bank and the Treasury; the legislation specified that the Governor was responsible for managing the Bank. However, legislation in 1951 established a new board (at that time of ten members), including the Governor, Deputy Governor and the Secretary to the Treasury, and maintained the responsibility of the Governor for managing the Bank. With minor variations in the number of members, this has been the structure of the Bank's Board since that time.

As indicated above, the Reserve Bank Act 1959 preserved the original corporate body, under the new name of the Reserve Bank of Australia, to carry on the central banking functions of the Commonwealth Bank, which had evolved over time; other legislation separated the commercial banking and savings banking activities into the newly created Commonwealth Banking Corporation. The Reserve Bank Act 1959 took effect from 14 January 1960.

There were no major changes in the functions of the RBA until the abolition of Exchange Control following the float of the Australian dollar in 1983. There had, however, been a gradual movement to market-oriented methods of implementing monetary policy, away from a system of direct controls on banks, and in the five years following the appointment of a major financial system inquiry (the Campbell Committee, in 1979), the Australian financial landscape was transformed to a virtually fully deregulated system. At the same time, the RBA gradually built up a specialised banking supervision function.

Another inquiry into the Australian financial system (the Wallis Committee) was announced in 1996. There were two major outcomes of this inquiry for the Bank, both taking effect from 1 July 1998. The banking supervision function was transferred from the RBA to a newly created authority, the Australian Prudential Regulation Authority, which was to be responsible for the supervision of all deposit-taking institutions. The Reserve Bank Act was amended also to create a new Payments System Board, with a mandate to promote the safety and efficiency of the Australian payments system. New legislation – the Payment Systems (Regulation) Act 1998 and the Payment Systems and Netting Act 1998 – was introduced, giving the Bank relevant powers in this area.

 

Source: http://bankingin.com/australia.html

 

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