CQIB Test Bank 2023 Questions and Answers with complete solution
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CQIB Test Bank 2023 Questions and Answers with complete solution
Which regulator makes and enforces rules which govern the capital adequacy of Australian Banks?
The Australian Prudential Regulation Authority - APRA
What events occurred in the Banking Industry in 1800s and early 1900s?
First B...
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CQIB Test Bank 2023 Questions and Answers with
complete solution
Which regulator makes and enforces rules which govern the capital adequacy of
Australian Banks?
The Australian Prudential Regulation Authority - APRA
What events occurred in the Banking Industry in 1800s and early 1900s?
First Bank in Australia was Bank of NSW, Established in 1817 Sydney.
Discovery of gold in 1851 led to minting of Australia's own gold coins spurring
development of Banking.
Boom in Australian property market in 1800s led to Banking crisis in 1893.
What events occurred in 1910-1920 in the Banking Industry?
Australian pound was issues as the Legal tender in Australia and the Australian Notes
act 1910 assigned responsibility for the issue of Bank notes to the Commonwealth
Treasury.
What events occurred in 1911-1913 in the Banking Industry?
Federal government established the Commonwealth Bank, which by 1913 had
branches in 6 states.
What events occurred in 1920 in the Banking Industry?
Commonwealth performed some central Bank functions, which greatly expanded in
World War II.
What events occurred in 1930-1931 in the Banking Industry?
1931 - The Great Depression, By the end Banking Industry became tightly regulated.
Banks classified as either savings or trading Banks.
What events occurred in 1990-2000 in the Banking Industry?
14/01/1960 - Reserve Bank of Australia was created
1969 - Rolled out ATMs, and early 1970 BSB identifier was introduced.
What events occurred in 2000-2017 in the Banking Industry?
Renewed emphasis on corporate governance, values, ethics. Jan 17 - Better Banking
program launched with initiatives:
- Independent review of retail Banking remuneration and how we pay staff.
- Getting problems fixed
- Protecting whistle-blowers
- Stopping poor conduct, and review of code of Banking practise
What are other Finance service providers?
Authorised Deposit-Taking Institutions (ADI's)
Building Societies:
Credit Unions:
What is a Building Society?
A mutual institution, which means that most people who have a savings account, or
mortgage are members. Each building society and are responsible for setting its
strategy.
- Owner by and for the members
- Limit on proportion of their funds that building societies can raise from wholesale
,money market
- Reinvest surplus revenue into the business to provide new products and services.
What is a credit union?
a non-profit-making money cooperative whose members can borrow from pooled
deposits at low interest rates.
What are non-ADI's financial intermediaries?
- Money Markets Corporations
- Finance Companies
- Securitisation Vehicles
What are the 4 types of financial markets
1. Primary Markets
2. Secondary Market
3. Exchange Traded Markets
4. Over the counter markets
What is the Interest rate or Debt market.
Trading (Buying and Selling) includes shart term securities and long term securities
such as government and corporate bonds.
What is the Foreign Exchange Market?
Exchanging one currency for another. Largest financial market in the World and 24
hours a day.
Trading shared in listed companies
What is the equities market?
What is the Commodities Market?
Trading in raw or primary products such as wheat, grain, cattle., or electricity.
What is the Derivatives Market?
A contract whose value is derived from one or more underlining assets or instruments;
for example, forward rate agreements or underlying exchange rates.
What is microeconomics?
the study of how households and firms make decisions and how they interact in
markets. Supply and demand that impact the price levels in the economy. Taxes and
Regulation created by governments.
What is macroeconomics?
The study of the economy as a whole
- Unemployment rates
- Gross Domestic Product - GDP
- Inflation
- Export and Imports
What are the Australian Economy Facts and Figures
14th Largest economy measured by GDP 1.99 Trillon - 2019
- Australian Labour force 12.3 millions June 2020
- Low levels of inflation 2% July 2020
- Unemployment rate 7%
What is Fiscal Policy?
Government spending and taxation that influences the economy.
What is the Monetary Policy
, RBA is responsible for Australians monetary policy - aims to protect price stability full
employment and economic prosperity.
What events occurred in 1980's in the Banking Industry?
Government adopted the four pillars policy. Announced it would reject any mergers
between the Big 4 Banks.
- NAB
- CBA
- Westpac
- ANZ
What is the role of the Bank?
1. Act as a financial intermediary between savers & borrowers.
2. Contributes to the development of the economy
What is financial intermediation?
The process of pooling funds from savers and using these funds to provide loans to
borrowers. The Bank acts as a go between, or intermediary for those who have extra
money and those who want to borrow.
What are the 4 types of investment Banking?
1. Debt Capital Markets
2. Equity Capital Markets
3. Private Placements
4. Mergers and Acquisitions
What is Debt Capital Markets?
Where a large company may want to build a factory and is looking to issue bond
financing to finance its expansion, or if a government wants to finance the building of an
airport, highway, or other large municipal project, it may issue bonds to raise capital.
What is Equity Capital Markets?
Where a company needs more money to grow and decides to raise the funds by
undertaking an initial public offering (IPO) whereby it sells its shares to the public and a
wider pool of investors for the first time.
What is Private Placements?
Where customers place an offering of bonds with an institutional investor such as an
insurance company or a retirement fund. Often this can be a fast-track option due to
lower regulatory requirements.
What is Mergers and Acquisitions?
Where a company is looking to buy another company, investment banks offer advice on
how the company should proceed with the acquisition, including the pricing of the offer.
What is a Key Risk for Investment Bankers?
Conflicts of interest - can occur when investment bankers, who have access to
confidential information from clients related to their business and prospects, can pass
information to their firm's traders. Investment banks need to establish barriers known as
'Chinese walls', or information barriers, within the organisation to prevent exchanges or
communication that could lead to conflicts of interest.
What are the main differences between commercial banking and investment
banking?
Commercial banks tend to serve clients ranging from individuals, small to medium size
businesses up to large corporate clients, other financial institutions, public agencies and
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