Financial Institutions (HSC SSCE Business Studies): Flashcards
📚Flashcards
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Practise the cards
10 cards from this deck
Financial institutions role
Financial institutions role
Collect funds from savers, channel to borrowers as intermediaries
How banks profit
How banks profit
Interest rate spread: charge borrowers more than pay depositors
Australia's Big Four banks
Australia's Big Four banks
ANZ, Commonwealth Bank (CBA), NAB, Westpac
Investment banks main clients
Investment banks main clients
Business sector, not individual consumers
How finance companies raise funds
How finance companies raise funds
Issue debentures (debt instruments with fixed term & interest)
Finance companies trade-off
Finance companies trade-off
Rapid access to funds but higher interest rates than banks
Life insurance companies as investors
Life insurance companies as investors
Important providers of both equity and debt finance to business
Current superannuation guarantee rate
Current superannuation guarantee rate
9.5%, increasing to 12% by July 2025
APRA's role
APRA's role
Prudential regulator of Australian financial services & super
Primary market vs secondary market
Primary market vs secondary market
Primary: new capital to business; Secondary: trades between investors