Objectives Of BAFIA

When you drive up to your bank or walk up to your teller, your main goal is to complete your transaction and move on with your day. The last thing on your mind is how that transaction is taking place. You don’t care what happens behind the scenes as long as your money is where it needs to be and is safe. As the banking and finance industry has transformed, so has the process of how your money is handled. To accompany those changes, regulators and lawmakers create laws designed to protect consumers, banks, and the economy as a whole. As you will learn, the history of the banking industry has changed drastically over the last two thousand years and even more so in the last century with the advance of technology. It only makes sense that those lawmakers must continue to update and invent new regulation to further protect those interested parties. My goal is to demonstrate just how rapidly and radically the finance industry has changed and how new elements being introduced to finance and banking will adapt the industry and the regulation.

There are various categories of banking; these include retail banking, directly dealing with small businesses and persons. Commercial and Corporate banking which offers services to medium and large businesses (Koch & MacDonald 2010). Private banking, deals with individuals, offering them one on one service. The last category is investment banking. These help clients to raise capital and often invest in financial markets. Most global banking institutions provide all these services combined. With all these institutions in existence within the same localities and offering similar services, there is a need to regulate the industry so as to protect the consumer and provide fair working environment for all banks (Du & Girma, 2011).

Morrison suggests that government should try to make regulations that can make TBTF policy effective rather than, try to end the policy, which is impossible. Morrison discusses the role of the policy in designing suitable capital regulations, in the restriction of bank scope and in institutional design. The author argues that financial institutions receive help from taxpayers and government because regulatory authorities believe that its failure would have severe effects on the country’s economy.

One Major Factor that effects CBA’s business is the Political and legal environment. this is because legislation, regulation and court decisions that govern and regulate business behaviour have the power to dictate many different aspects of the organisation. As one of big four banks, that maintain market control in Australia, CBA has strict legislation and regulations it must abide, such as the 1959 Commonwealth Banking Act (Austlii.edu.au, 2016), which defines the “banking business”.

In most countries, commercial banks’ reserve accounts with the central bank must have a positive balance at the end of every day; in some countries, the amount is specifically set as a proportion of the liabilities a bank have that is on its customers. This is known as a reserve requirement. At the end of every day, a commercial bank will have to examine the status of their reserve accounts. Those that are in deficit have the option of borrowing the required funds from the central bank, where they may be charged a lending rate which is also referred to as the discount rates on the amount they borrow. In a balanced system, where there are just enough total reserves for all the banks to meet requirements, the short-term interbank lending rate will be in between the support rate and the discount rate. Both the Treasury and the central bank are involved in these reserve management operations to maintain interest rate stability (Palley, 2012). This applies to the relationship between the Central Bank of Kenya and its regulatory requirement to maintain a capping that is below 14%. CBK finances commercial banks at much lower rate on their borrowing so that the banks can fix their interest charges on borrowed money at certain percentage that must not exceed the limit set by the

A3.a) A minimum fraction of what customers can deposit and the amount of notes commercial banks can reserve.

Financial legislation is a form of legislation or perhaps supervision, which usually topics financial institutions in order to certain specifications, limits in addition to guidelines, planning to take care of the ethics in the financial system. This is taken care of by the authorities or perhaps non-government group. Economic legislation has also influenced the framework connected

ASIC relays in market integrity, consumer protection, and regulation on financial institutions like investment banks or finance companies. However, ASIC does not investigate concerns about the consumer protection, its delegated to the Australian Competition and Consumer Commission (ACCC). To sum up, banks are also obligated to follow the Anti money Laundering and Counter Terrorism Financing Act 2006. It is required to monitor every customer using the risk-based approach, which is a program from the Australian Transaction Reports and Analysis Centre (AUSTRAC) to identify any suspicious activities in any account and also to file an annual report for the records.

What is the meaning of financial regulation? Specifically, the financial regulation means there are sets of regulation or supervision, which let the financial organizations comply to requirements, restrictions formulated by government or any other institution. The aim for financial regulation is keep the integrity of financial system, and this objective composing four parts ,the first parts is the regulation should maintain the confidence in financial system, the second part is enhancing the stability of financial system ,the third part is it should protect the consumer rights and the last one is reduce or prevent the financial crime( Kushmeider, Rose Marie,2005).

The Federal Reserve can also change the reserve requirements of banks. "Reserve requirements are the amount of funds that a depository institution must hold in reserve against specified deposit liabilities" (Reserve requirements, 2012, Fed). When banks have high reserve requirements, as determined by the Fed, they have less money to lend to consumers. Conversely, when the Fed lowers reserve requirements, more liquid capital is

What is the meaning of financial regulation? Specifically, the financial regulation means there are sets of regulation or supervision, which let the financial organizations comply to requirements, restrictions formulated by government or any other institution. The aim for financial regulation is keep the integrity of financial system, and this objective composing four parts ,the first parts is the regulation should maintain the confidence in financial system, the second part is enhancing the stability of financial system ,the third part is it should protect the consumer rights and the last one is reduce or prevent the financial crime( Kushmeider, Rose Marie,2005).

As a result, policymakers, congressmen, local and international organizations, and governments would be able to use this work for the financial and banking reform. At the end, the purpose is bringing some balance between TBTF banks and small and

Prohibits any invitation to the public to deposit money with the company for fixed periods or payable at call, whether bearing or not bearing interest.

In 1998, a new amendment allowed foreign banks to freely establish branches in Hungary. All the mentioned legislation culminated in the formation of the Hungarian Financial Supervisory Agency (HFSA). The HFSA is made up of the banking supervisory board and supervisory agencies responsible for overseeing insurance and pension funds. Funded through fees from the financial institutions it oversees, the HSFA is an independent agency that reports to the ministry of finance as well as the Parliament. Although not capable of setting binding regulations, the agency can impose corrective sanctions and its determinations can influence the withdrawal of banking licenses by the Ministry of Finance and the president of the Hungarian National Bank. The HSFA Act clearly defines the functions of a “bank” and restricts the actions of other financial service agencies accordingly. Although a broad step for Hungary’s economy, the agency has been criticized for not properly addressing many of

The integration is promoted through the introduction of liberalisation in domestic financial markets with the help of AFAS and on the other hand AFAS attempts to consolidate the financial structure such as harmonisation of regulations. The governors of the central banks of the ASEAN members proposed the ABIF as a component of the AEC Blueprint in 2011 and framework formulation is still a work-in-progress. The materialisation of banking sector integration is expected to be achieved in 2020. For successful integration ten central banks have reached agreement on following four points; 1) harmonisation of domestic regulations, 2) infrastructure development for stabilisation of financial sectors, 3) enhancing capacities of less developed countries (BCLMV) (which are Brunei Darussalam, Cambodia, Laos, Myanmar, and Vietnam) and 4) installation of a criteria for Qualified ASEAN Banks (QAB). QABs will be able to operate in all countries.