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Essay Available:
Pages:
10 pages/≈2750 words
Sources:
4 Sources
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 46.8
Topic:

Financial Markets and Institutions. The Reserve Bank of Australia Monetary Policy

Essay Instructions:

1)Please be kind to read below my personal requirement for the essay :
- This essay must be NO less than 2600 words,
-Please write the essay in a very simple and direct way , so when I will receive it I can understand its content , and if needed I can do some edit. If the assignment is too technical or complex, I cannot understand it and I cannot edit it, as I am not an expert in the field.
-Please make the assignment also argumentative , do not just write symbols or calculation, but please explain with words and try to argument end to explain the calculations that have been done, so I can also understand what arethese calculations for and their meaning.
-Please do not use High Technical language otherwise that can make someone suspicious, but please use simple language to describe the topics.
-Please provide my assessment in WORD document and NOT IN PDF.
-Please use reliable references which I can put into the essay and for which I will not be marked down. You can use also a company website, or a reliable and famous financial website as reference, that will make my life easier when I ll need to edit it. ( If you'll put academic references from book, and you do not write then in the way my College wants , then I ll have to edit it, but it will be hard to edit it as I ll probably will not have all information to reference the way they want), so please use company website or financial official website, so I can easily access to them and check them.
-Please write the assignment in the following structure and in the following order : 1) Introduction 2)Body 3) Conclusion 4) References List
- Please be aware that my university portal uses Turnitin for detecting plagiarism so please be very careful when writing things which comes from other sources , as Turnitin will immediately detect them and if it will find some similarity they will make me fail the assignment immediately. That's why I would like the assignment to be quite personal and argumentative.
- Please always use third person for the assignment and never write in the first person.
2 ) Now that you have my personal requirements for the assignment , I will write below the assessment question :
-Background
Read the article ‘RBA joins race to the bottom’ commenting on the dangers of the zero- interest trap and the consequential ineffectiveness of some central banks. Of concern is that ever-more intensive monetary policy stimulus cannot resurrect inflation in affected economies. In turn, this goes to the concern of how central banks operate and the flow on effect of ‘exacerbating an ultra-low yield environment that crunched investors and shattered pension retirement plans the world over’ (Greber & Shapiro 2016). However, the issue remains how central banks best engage monetary policy in low inflationary environments and the flow on effects to asset values (bonds, derivative, share, options, futures and forwards) and investment yields in the financial market.
The article that forms the basis for this assignment is:
Greber, J & Shapiro, J 2016, ‘RBA joins race to the bottom’, Australian Financial Review, 7–8 May.
-Report :
You are required to select a central bank responsible for monetary policy in a country of your choice. Click on the link for a list of central banks: http://www(dot)bis(dot)org/cbanks.htm
For this assignment, you are required to prepare a report. Your report must address following:
1)Discuss the role of a central bank in a country, particularly in implementing monetary policy. Comment on any regulatory requirements imposed on the central bank in performing their responsibilities.
2)Comment on the current economic environment (inflation and interest rates) of your selected country, monetary policy employed by the central bank, and effects of those monetary policies on financial markets including asset values and yields.
3)In the article ‘RBA joins race to the bottom’ (Greber & Shapiro 2016) the Reserve Bank of Australia Governor (RBA) refers to taking a medium - term view to achieve the CPI inflation target, importance of asset prices and that leveraged dynamics matter. Outline and discuss why the RBA Governor thinks leverage matters. Explain the relevance of this statement to central bank practice in your country?
4)Identify and discuss how Authorised Deposit Institutions (ADIs) deal with credit, liquidity, operating and interest rate risks in the selected country. Comment on how Basel accord ii or iii helps deal with capital and liquidity risks in your selected country.

Essay Sample Content Preview:

The Reserve Bank of Australia Monetary Policy
Name:
Institutional Affiliation:
The Reserve Bank of Australia Monetary Policy
Introduction
Over about the past three decades, Australia’s monetary policy structure has changed considerably, with the most substantial transformation being the embracing of an inflation target at the beginning of the 1990’s according to Fontaine (2014). Moreover, changes have also been there at the operational level. Most of these adjustments were a part of a transformative process after the deregulation of money markets in the first half of the 1980s; however, an essential modification happened in January 1990 the time the Reserve Bank of Australia started announcing changes to the position of financial policy, as mirrored in the level of overnight rates. Before that, it functioned in the market and left its participants to come up with their conclusions regarding the monetary policy. One outcome of the move to the announcement was that the interest rate adjustments are currently applied as distinct steps.
The paper deliberates on some of the reasons behind the changes in the operations processes and the impact they have had on the financial markets as well as the transmission mechanisms. It is structured in five sections. The first section looks at the role of the Reserve Bank of Australia (RBA), mainly in the implementation of monetary policy and supervisory requirements imposed on RBA in executing its responsibilities. Section 2 is concerned with the existing economic environment in the country regarding interest rates and inflation, the monetary policy embraced by the bank in accruing out its duties. The third section delves on the reasons the RBA Governor, Glenn Stevens thinks of leveraging matters. The fourth part discusses how Authorized Deposit Institutions deal with liquidity, credit as well as operating and interest rate risks in Australia. Finally, the fifth part gives some concluding comments on the overall issue of financial summary in the country.
The role of the Reserve Bank of Australia in implementing monetary policy
A statute of the country’s central bank recognizes the RBA. Under its empowering law, the Reserve Bank Act 1959, the institution’s duties includes recognizing and executing monetary, endorsing economic stability, issuing bank notes, offering banking services to the Australian government, supervision of the country’s foreign reserves, determining payment system strategy, and conducting high-value payment system ("Functions and Objectives | Reserve Bank of Australia Annual Report – 2014 | RBA", 2014).
Its responsibility for the Australia’s fiscal policy is set forth in section 10 (2) of the Reserve bank Act that states the obligation of the RBA board, within the retractions of its authority, to make sure that the financial, as well as the banking policy of the institution, is directed to the utmost benefit of the Australian citizens. Moreover, it continues to express that the authorities of the Bank are executed in a way as, in the view of the Reserve bank board, is best involved in:
• Maintaining the stability of Australian currency
• Ensuring full employment in the country; and
• ...
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