Banking Operations and Governance Assignment

Question.

Please answer each part in separately, in essay form addressing the questions.

PART A -- word limit : 700 words

1. What do you understand about shadow banking? Name one example of an institution in Australia which fall into this category.
2. What are some of the arguments that the activities of these institutions should be monitored by regulators?
3. Do you agree that these institutions should be regulated?

PART B -- word limit : 700 words

During the recent months we witnessed many financial institutions suffered significant losses in their market value. There are views who argue the failure of a particular company/industry such as bank would be detriment to the overall wellbeing of the economy. There are also views that banks should be allowed to fail.

Required:

1. List two arguments which support the view banks should be allowed to fail.
2. List two arguments which support the view banks should not be allowed to fail.
3. (current issue) What are some of the potential explanations (list 2) why the major banks only passed part of the rate cut after the Reserve Bank of Australia cut the overnight rate to 1.75% on 2nd of August.1

PART C-- word limit : 700 words

1. What do you understand about the concept of net regulatory burden?
2. Why should the government put in so much effort in regulating and monitoring the activities of the financial institutions?