Compare and contrast the financial systems of two different countries. Use an institutional approach to describe the system. Comment on the impact on, and response to the GFC in each country Essay Example for Free

Comp be and contrast the fiscal systems of two different countries. Use an institutional approach to describe the system. Comment on the impact on, and solution to the GFC in each country Essay1.0 IntroductionA monetary system inquires for efficient allocation of resources among the surplus and soonfall units (Viney 2009) as such it encourages more nest egg where currency argon provided for investor to invest and also ease the transactions for goods and work (Viney 2009). there are three briny comp adeptnts in the monetary systems which are the monetary institutions, fiscal instruments and financial grocery stores. All three types of financial system each carry different function, roles and regulations.However, financial institutions entrust be mainly focus in this research essay. worldwide fiscal Crisis (GFC), also kno(prenominal)n as the great recession occurs in the year of approximately 2007-08. GFC has caused a several impact on the economy which leads to a s everal break away of the financial institutions. For instance, the collapse of Lehman Brothers, one of the major investment banks in US (Australia Bureau of Statistics 2010).Thus, the objective of this essay is to strain both financial system of the chosen countries which are united States and Australia, also the impacts and responses on the GFC in both of the chosen countries.2.0 Compare and Contrast both financial Systems2.1 Central BankThe central bank of the United States (U.S.) is known as Federal prevail System (FED) whereas the central bank of Australia is known as the obtain Bank of Australia (RBA).The Federal obligate Systems structure consist of the Board of Governors which are duly appointed by the president, the Federal Open mart Committee (FOMC), and 12 regional Federal Reserve Banks located makeout the major withdrawers in the country (The Federal Reserve Board 2003).Banking in U.S. is set at both federal and state level. unconnected U.S., Australia has on ly one central bank which is the Reserve Bank of Australia. However, both central banks are freelance within their government (Reserve Bank of Australia 2001) whereby for FED, the monetary policies decisions do not reserve to go through the Presidents authorization, and for RBA, they produce statutory control open up by an act of parliament which grants themspecific powers and obligations to carry out necessary policies (Reserve Bank of Australia 2001).On the other hand, RBA has two carte, which are the reserve bank board and payment systems board (Reserve Bank of Australia 2001). The reserve bank board is responsible for monetary and banking policy whereas the payment systems board is responsible for haughty risk in the financial system, promoting the efficiency of the payments system, and promoting disputation in the market for payment operate, consistent with the overall stability of the financial system (Reserve Bank of Australia 2001).The role of FED is to deal the co untrys monetary policy, which includes panoptic vocation, stable prices and moderate long term interest rates as stated in the Federal Reserve Act (Board of Governors of the Federal Reserve System 2008).Furthermore, they maintain the stability of the financial system, supervise and regulate banking institutions, provide financial services to depository institutions, and foreign decreed institutions. FOMC will determine the cost and availability of capital and credit in the countrys economy by affecting the tax deduction rate, reserve requirements and controlling the open market operations (Board of Governors of the Federal Reserve System 2012).Likewise, the role of RBA is to conduct monetary policy as closely, which includes the maintenance of price stability, full employment and the economical prosperity and welfare of the Australian citizens (Reserve Bank of Australia 2001). Besides that, they also set the cash rate to meet a medium term inflation target (Reserve Bank of A ustralia 2001).Moreover, RBA must maintain a strong financial system and efficient payments system and the issuing of the nations bank notes. Selected banking services are provided to the Australian government, agencies, official institutions, and a number of overseas central banks (Reserve Bank of Australia 2001). 2.2 Commercial BankCommercial banks in the U.S. are quite same to those of Australia whereby their main role is to act as a financial intermediary by channeling fundsfrom agents who deposit money and lenders who needs fund and wants to borrow. These agents and lenders include folks, businesses, governments and foreigners.Australia beseech products and services which include balance sheet transactions and off-balance-sheet transactions (Viney 2009). For balance sheet transaction, the first purpose is to loan activity to match the available sum of deposits that they received from customers. This activity is known as assets wariness (Viney 2009). The second purpose is t o manage their sources of funds in order to ensure that they have sufficient gist of funds available to meet the loan demand or any other form of commitments. This activity is known as liabilities management (Viney 2009).For off-balance-sheet transactions, it includes a considerable volume of business that is not recorded either an asset or liability on their balance sheet. In comparison, U.S. obtains their funds (liabilities) by issuing deposits, checking deposits, measure deposits, saving deposits (Samolyk 2004). For their use of funds (assets), it includes making commercial, consumer, and owe loans, and by barter foring U.S. government and municipal bonds (Samolyk 2004).Therefore, commercial banks play an cardinal role in keep business borrowers. The percentage of non-financial business borrowing that commercial banks fund on their balance sheets has not declined remarkably in the past five decades or so.The commercial banks in U.S. provide trade financing, foreign exchang e, corporate pays and miscellaneous banking services which include currency specify credit cards, corporate checking accounts and lock boxes (Ireland n.d.). Moreover, the macrocosm of commercial banks made reliable transfer of funds between different countries all over the world possible. Furthermore, the distri exactlyion of valuable economic and business entropy among clients around the world is made possible as well (Samolyk 2004). Similarly, there are basically two functions of a commercial bank in Australia.The unproblematic functions are obviously to carry deposits from individuals, and grant loans and advances for personal or corporate purposes. The secondary functions consists of collecting and supplying business information, providing reports on the credit worthiness of customers, stand up guarantee on behalf of itscustomers for making payments for the purchase of goods, vehicles, machinery, and so on. Besides that, they also provide customers with foreign exchange f acilities and they also provide safe deposits vaults or lockers for valuables, important documents and securities.In a nutshell, for both countries, there are several similarities in the roles of commercial banks. Commercial banks promote capital formation whereby they accept deposits from individuals and businesses, whereby these deposits are then made available to the businesses which will make use of them for industrious purposes in the country (Ireland n.d.). Moreover, they also provide short and medium term loans for entrepreneurs to invest in new enterprises or businesses. Furthermore, they also promote trade and industry since they offer the use of bank draft, bill of exchange, check, credit cards and letters of credit.In one way or another, they also influence the level of economic activity by influencing the rate of interest and the availability of credit in the market. Most importantly, they go through the monetary policy proposed by FED or RBA to bring about price stabi lity, full employment and promote economic growth within the country. There are several sources of funds for these commercial banks.The main source would of course be from the current account deposits. However, they do have other sources as well such as demand deposits, term deposits, negotiable certificates of deposits, bills acceptance liabilities, foreign currency liabilities, loan capital and shareholders equity. 2.3 Non-bank financial Institutions2.3.1 deposition Financial InstitutionDepository institutions (DPI) act as a financial intermediary similar to a commercial bank, whereby its main task is to accept deposits from surplus units and then issue loans to the deficit units in the financial system (Viney 2009). The main regulator for Australia is Australia Prudential Regulation Authority (APRA) whereas for U.S. is the Federal Deposit Insurance Corporation (FDIC).As for U.S., there are about 9, 000 functional depository financial institutions in the U.S. They operate throug h 92, 000 branch offices located in different states (Finance Maps of World 2011). Their role is to set a benchmark for DPI in the ground ofcommercial banking. The funds that are collected is used to meet the credit need of others (Finance Maps of World 2011). On the other hand, Australias DPI consists of three main institutions which are banks, grammatical construction societies and credit unions (Reserve Bank of Australia 2001). There are a total of 171 institutions of which 55 are banks, 11 are building societies and 105 are credit unions (Reserve Bank of Australia 2001).2.3.2 Investment banks and Merchant banksInvestment banks and merchant banks primary objective is to collect funds and invest them in the market to achieve specific goals set for different types of investments (Viney 2009). There are generally two types of investment companies which are open-end or closed-end mutual funds. Open-end funds will accept new investment and trade in old ones, whereas for closed-end fu nds they only accept funds once and then do not take in any additional new funds. Investment companies have recently become more popular among U.S. and Australia, and have managed trillions of dollars.As for U.S. investment banks specialize in facilitating financial transactions rather than just providing finance. They have a good reputation as a financial innovator since their responsibilities includes the improvement of new financial products and services which must meet the ever changing needs of clients (Kumar, Chuppe Perttunen 1997).In contrast, investment banks and merchant banks in Australia are not considered an authorized bank but ofttimes referred to as money market corporations (Viney 2009). They do not have a depositor base to include in their assets. Therefore, they raise funds through the issues of securities from the international money and capital markets (Viney 2009).2.3.3 Contractual savings institutionsContractual saving institutions offer contract that specify, in return for periodic payments to the institutions, and the institutions will make payments to the contract holders if any specified event occurs (Viney 2009). They include general insurance companies and superannuation funds. As for U.S., their insurance companies raise money mainly from the issuance of insurance policies and collecting annual premiums. or so might also borrow from the dept capital markets as an alternative source of funds.Forsuperannuation funds, or more popularly known as pension funds in the U.S., they are funded by the deductions from employees monthly salary in addition with certain contribution by the employers (Cohen Schubert 2010). On the contrary, Australia have make it compulsory for their employees to conduct to the superannuation system (Cohen Schubert 2010) whereby for U.S., an estimated 78 zillion working Americans which include the sole traders, employees who work for small employers or even part timers, do not have access to a retirement fund (Cohen Schubert 2010).For U.S., it has firstly introduced as a beneficial payment of employment whereas for Australia, it was created as a comprehensive system from the scoop (McLennan 2000).2.3.4 Finance companiesFinance companies and general financiers are basically institutions who provide loans and charter finance to clients by borrowing funds directly from the financial market (Viney 2009). As for U.S., these institutions raise funds in the debt market by issuing securities. Therefore, they raise funds solely by issuing debt or borrowing from other institutions but not taking deposits directly (Samolyk 2004). Similarly for Australia, they raise funds by issuing commercial paper, bonds and medium-term notes (Reserve Bank of Australia 2001).2.3.5 Unit trustsUnit trusts is formed under a trust deed, and is controllight-emitting diode and managed by trustee by selling units to the public as a means to raise funds whereby investors purchase units in the trust (Viney 2009). As for U.S., there are generally two types of unit trusts, one that falls under private management and another that falls under direct state authority.Their role mainly involves traditional banking activities that are related to issuance of loans and deposits. The major difference between private and state authority trust is state authority institutions obtain funds from deposits and through the exchange of shares, whereas private institutions operate as an intermediaries by generating finance through providing investment opportunities to clients (Samolyk 2004).Likewise, Australia too has two different types which are public unit trusts and cash management trusts(Viney 2009). Public unit trusts focus more on gathering investors funds and investing it into specific types of assets (Viney 2009). However, for cash management trusts, they focus more on trust deed which are open to the public by confining their investment to financial securities which are accessible through the short-term mone y market (Viney 2009). 3.0 The impact of GFC3.1 United StatesThe birth of the global financial crisis begin somewhere in 2008. It all started in early 2006 when the subprime mortgage market in the United States (U.S.) began to reveal an increasing rate of mortgage defaults due to the bursting of the housing bubble (Mishkin 2011). Subsequently, in late 2006, these defaults caused a decline in the U.S. housing prices after about a decade of extremely high growth statistics. afterward on, the prime mortgage markets were affected as well and were cover a higher default rates by the end of 2007.Therefore, when the mortgages backing the securities began to fall in value, the value of the securities fell as well (Nielsen 2010). Looking at the fall in price of their assets, investors quickly attempt to liquidate their assets in around late 2007. Consequently, in 2008, a major financial crisis hit U.S. which led to the most severe recession since World War II. The financial crisis in the U .S. economy eventually spread to many foreign nations, affecting the global financial system, resulting in a global financial crisis (Shah 2010).The degree of the global financial crisis was so severe that some of the worlds largest financial institutions have collapsed. U.S. was no exception. History was made when one of the largest investment banks in the world, Lehman Brothers, collapsed in September 2008. Some other institutions have been vehemently bought out by their competitors at a low price, and in some cases, the governments of the richest countries in the world had no choice but to sought an expensive bail out and deport plan to pay off some of the remaining large banks and financial institutions (Shah 2010).These were all done at the expense of the US taxpayers. Approximately $9.7 trillion of US taxpayers money alone have been spent for bailout packages and plans (Dhameja 2010). According to Bloomberg, $14.5 trillion, or about 33%, of thevalue of the worlds companies h ave been wiped out by the crisis. Therefore, as credit became scarce and visual perception an increase in the lack of confidence in the U.S. financial institutions, international banks started to increase the interest rate for inter-bank borrowing, known as the LIBOR (Mishkin 2011).Subsequently, a crash in the US stock market was observed, liquidity drying up, and employees were being laid off which cause an increase in the unemployment line (Dhameja 2010). U.S. was in a state of obliviousness even after eleven months since the fall of Lehman Brothers. Banks virtually stopped lending to each other. Although several proposals for stimulus packages and some bailout plans have provided some relief, it seems that there was zilch more that could be done to ease the situation (Mishkin 2011). At the same time, smaller businesses hardly had any chances for a bail out or rescue plan and more people went into bankruptcy.Additionally, there was a decline in the US imports from its major tra ding partners such as the European Union, Mexico and China, due to the meanwhile in economic activity (Nanto 2009). Private sectors practically stopped borrowing, trade credit was also hard to obtain, and with continuous falling demand, especially investment goods and manufacturing consumer durables like cars, export volume decreases, foreign GDP fell as well, trade volumes eventually collapsed (Dhameja 2010).Moreover, the risk premium on inter-bank borrowing which used to be close to zero, rose steeply to five per cent. Besides, the risk premium on corporate bonds rose to over six per cent. Although the US government tried to interpose liquidity into the financial markets, the damage was already done (Chambers 2010). 3.2 AustraliaGFC has less effect on Australia as compared to other countries such as US, UK and etc. Most demonstrable countries had suffered recessions where Australia experienced a down turn in the economy (Stevens 2009). However, there is no governments support r equired by the financial institutions in such situations like capital injections or the acquisition of distressed loan portfolios (Australia Bureau of Statistics 2010).The major impact of the GFC has resulted on the loss of confidence in the household sector (Stevens 2009). This is due of the decline in the equity price causes a get downd of the household wealth (The fantan of the Commonwealth of Australia 2009). Thus, this leads to an effect of low expenditure and investment which resulted to a decline growth of household as they felt insecure about the capacity to spend and borrow (Australian political relation n.d.).GFC has also squeeze on the unemployment rate which result shown an increase of number that lead to a decrease in the economic growth (Australian Workers Union 2009). The part-time employment has change magnitude which balance to a loss of full time jobs where this also effect on the working hours such as the decrease hours in work (Chesters n.d.). original demo graphic groups have been affected by the job loss. For instance, the generation Y (18-24 years) has been affected (Tanton et al. 2010). However, they remain optimistic and relied heavily on the government benefit (Tanton et al. 2010).Moreover, competition in the banking system has also been affected by the GFC (Australian Super Investment Conference 2010) which resulted on harm towards the smaller banks and non-bank intermediaries as compared to the large banks where it leads to an increase in the cost of funds (The Senate 2011).Thus, this has impact on a greater gap between the major banks and other financial institutions (Australian Super Investment Conference 2010). The collapse of the Lehman Brothers, has led to a loss of confidence towards the banks which caused a decrease on the demand for credit (Australian Super Investment Conference 2010).4.0 The response of GFC4.1 United StatesGFC had staidly impacted the United States (U.S.) as compared to other countries such as Austral ia where it leads to the collapse of one of the major investment banks, Lehman Brothers. Thus, plans had been made by the U.S. government in response to the impact to prevent the situations toworsen.In comparison to Australia, the financial institutions do not need government intervention to assist them such as injection of capital. Unlike U.S., the government intervene where the central banks has purchased the government debt and the troubled asset which cost US$2.5 trillion in order to raise funds in the financial institutions (Halmarick 2009).This has resulted in the largest liquidity injection done by the government. They tried to inject liquidity into banks by buying share of banks, and purchase of convertible bonds of banks, whereby the government will be paid certain amount interest and the government will be given an option to convert these bonds into equity (Nanto 2009).Furthermore, FED tried to reduce the interest rates by cutting the Fed Funds target from 5.0% in Septembe r 2007 to an extremely low 0-0.25% as at December 2008. Later on, in March 2009, Fed started a Quantitative Easing policy by agreeing to buy a $300 gazillion in Treasury bonds (Halmarick 2009). The main purpose is to lower the interest rates across the yield curve and to provide additional funds to the banks.Moreover, US tried to overcome slowdown by stimulus packages of about $10 trillion for banks and guarantees to depositors, and also enhanced public outlay (Dhameja 2010). According to Bloomberg, by February 2009, the total US bailout amounted to $9.7 trillion, sufficient to pay off more than 90 per cent of Americas home mortgage and was about 70 per cent of US GDP (Halmarick 2009).In addition, President Obama sign-language(a) two packages which are the American Recovery and Reinvestment Act worth $787 billion and 5.5% of GDP. The main features include an estimated $285 billion in tax reduction for individuals and businesses, unemployment benefits, extra spending for food stam ps, and also health care subsidies for workers that have been laid off (Halmarick 2009). These packages positively taper to generate at least three to four million job opportunities by the end of 2010.Additionally, US tried their best to prevent more banks from failing. The first case was Fed approves financing loans arrangement for J.P. MorganChase to buy over Bear Sterns in March 2008. The second case was government controlled mortgage giant Freddie Mac received $146 million to ease their situation. Next, AIG borrowed $85 billion from Fed to prevent them from failing (Halmarick 2009). However, Fed couldnt do much to save Lehman Brothers from failing and thus they went into bankruptcy in 2008.Therefore, US government aim to chant the global financial institution mainly to prevent losses of capital flows due to the impact of GFC to the developing and emerging economy by concord on the increase of funds (Australian Government n.d.). Besides, government also actively plans to purch ase equity from the financial institutions to ensure there is a sufficient liquidity which enable them to conduct activities such as investment, issue loan and deposit and much more.GFC has caused a fall of confidence in the financial institutions. Thus, government had opinionated to guarantee all senior unsecured debt and also the non-interest bearing transaction deposit account mainly to increase the confidence losses in the financial institutions (Australian Government n.d.). 4.2 AustraliaAustralia had prepared by implementing an effective monetary and fiscal policy in response to the economy when one of the biggest investment bank in United States (US), Lehman Brothers collapsed in September 2008. This helps to avoid the economy from slowing down and lessen the impact of Global Financial Crisis (GFC) in Australia as compared to other countries such as US, where government responded on the measurement.In order to strengthen the operation of the financial system, government has i ncrease up to $25 billion of the issue of Commonwealth Government Securities(Britton 2008), more choices of assets provided for Australian Office of Financial Management (AOFM) to invest in, together with a better lending facility of AOFM (Australian Government n.d.).In response to the recommendations of Financial Stability Forum, legislation has been introduced to establish Financial Claims Scheme (Britton 2008)where the availability of funds is given to the depositors and general insurance policyholders when the financial institutions failed to perform (Australian Government n.d.). Besides, the bank deposits and in large quantities funding is guaranteed by the government for a period of 3 years (DAloisio 2010).Additionally, the $10.4 billion Economic Security Strategy has been carry on as this helps to strengthen and stabilize the economy (Australian Government n.d.). This aim to provide protection to households and other financial institutions to gain back confidence lost due to GFC (Australia Bureau of Statistics 2010). Besides, first of all Home Owners Boost has been introduced mainly to assist the housing sector to stimulate activity which benefits the economy (Australian Government n.d.).The competition in the market of housing finance has been back up by the government through the purchase of the Residential Mortgage Backed Securities (RMBS) (Australian Government n.d.). However, a total of $840 million has been taken out by RBA from RBMS under a repurchase agreement mainly to ensure there is sufficient liquidity in the market (Britton 2008).The naked and covered of the short sale securities has been ban for a period of 30 days by the Australian Securities and Investments Commission (ASIC) (Helmes et al. 2009). However, a clarification of the allowable covered shares has been issued by the ASIC in continue of the set requirement (Britton 2008). A draft legislation for the covered of short sales has been released by the government and it is open for the public to comment on savings bank 21 October 2008 (Britton 2008).Government initiated the plan of Nation Building and Jobs Plan which cost around $42 billion which was mainly to support the jobs in the country where it supported an estimated of 90,000 jobs (Sherry 2009). This help to decrease the unemployment rate and then boost the economic growth where it encourages more activities and also to increase consumption in the economy (Sherry 2009).5.0 ConclusionIn conclusion, the global financial crisis (GFC) had brought so much damage not only to U.S. and Australia, but to the entire nations financial system globally. Even some of the wealthiest nations saw the collapsed of its financial institutions while some had to undertake an extremely expensive bail-out package. As for U.S. they suffered more severely compared to Australia. This is because the Reserve Bank of Australia has taken measures in advance of the global financial crisis. Thus, they were not as heavily affected as compared to other countries.Therefore, U.S. should learn from Australia by implementing policies ahead of any unexpected crisis to minimize the impact and damage done to their financial system. Evidently, it is better for them to prevent and be prepared rather than solving an issue when the damage has already been done. The policies implemented should include healthy control of the discount rate, reserve requirement and also minimal inflation targeting such as two to three per cent.The right policy implementation will lead to full employment in the country, a healthy level of economic activity and international trades, which will eventually increase the countrys GDP to an optimal and desirable level.(4203 words)List of ReferencesAustralia Bureau of Statistics 2010, The global financial crisis and its impact on Australia, Viewed 8 may 2012, .Australian Government n.d., Part 2 The Governments Response to the Global Financial Crisis, Viewed 10 May 2012, .Australian Super Investment C onference 2010, The GFC and its impact on Australian capital markets, Viewed 12 May 2012, .Australian Workers Union 2009, The impact of the Global Financial Crisis on Australian Workers, Viewed 12 May 2012, .Board of Governors of the Federal Reserve System 2008, Federal Reserve Act,viewed 2 May 2012,Board of Governors of the Federal Reserve System 2012, Federal Open Market Committee, viewed 2 May 2012, http//www.federalreserve.gov/monetarypolicy/fomc.htm.Britton, H 2008, Government response to the Global Financial Crisis, Viewed 9 May 2012, .Chambers, C 2010, US financial recovery Political regulations or a plan for the future?, Journal of Banking Regulation, vol. 11, no. 3, pp. 240-255, viewed 5 May 2012, retrieved from EBSCOhost database.Chesters, J n.d., The Global Financial Crisis in Australia, Viewed 10 May 2012, .Cohen, J Schubert, S 2010, Russells experience in Australia provides lessons for U.S. retirement plan sponsors, Viewed 14 May 2012, .Cook, RC 2008, Impacts of the F inancial Crisis The U.S. is becoming an Impoverished Nation, viewed 5 May 2012, .DAloisio, T 2010, Responding to the financial crisis ASIC story, Viewed 8 May 2012, .Dhameja, N 2010, Global Financial Crisis Impact, Challenges sales outlet, The Indian Journal of Industrial Relations, vol. 45, no. 3, viewed 6 May 2012, retrieved from EBSCOhost database.Finance Maps of World 2011, Depository Financial Institution, Viewed 14 May 2012, .Halmarick, S 2009, The Global polity Response-The unprecedented becomes commonplace, Colonial First State Global Asset Management, viewed 5 May 2012.Helmes, U, Henker, J Henker, T 2009, How the Australian ban on short selling during the GFC affected market quality, Viewed 11 May 2012, .Ireland, PN n.d. Money, Banking, and Finacial Markets, Department of Economics, viewed 3 May 2012, .Kumar, A, Chuppe, T Perttunen, P 1997, The Regulation of Non-Bank Financial Institutions, The International Bank for reconstruction and Development, U.S.A.McLennan, W 2 000, 2000 Year Book Australia No.82, Australia Bureau of Statistics, Australia.Mishkin, FS 2011, Over the Cliff From the Subprime to the Global Financial Crisis, Journal of Economic Perspectives, vol. 25, no. 1, pp. 49-70, viewed 4 May 2012, retrieved from EBSCOhost database.Nanto, DK 2009, The Global Financial Crisis Analysis and Policy Implications, Congressional Research Service, viewed 4 May 2012.Nielsen, RP 2010, High-Leverage Finance Capitalism, the Economic Crisis, Structurally Related Ethic Issues, and Potential Reforms, Business Ethics Quarterly, vol. 20, no. 2, pp.229-330, viewed 6 May 2012, retrieved from EBSCOhost database.Reserve Bank of Australia 2001, Financial Stability, Viewed 13 May 2012, . Reserve Bank of Australia 2001, Governance, Viewed 13 May 2012, .Samolyk, K 2004, The Evolving Role of Commercial Banks in U.S. Credit Markets, FDIC Banking Review, vol. 16, no. 2, viewed 3 May 2012, .Shah, A 2010, Global Financial Crisis, viewed 7 May 2012, .Sherry, N 2009, Aus tralias policy response to the global financial crisisaddress to the institute of actuaries of Australia biennial convention 2009 Sydney, Viewed 10 May 2012, .Stevens, G 2009, Financial crisis developments-impact on the Australian economy, Viewed 12 May 2012, .Tanton, R, Keegan, M, Vidyattama, Y Thurecht, L 2010, The economic vitality report the impact of the GFC on Australians, Viewed 10 May 2012, . The Federal Reserve Board 2003, The Structure of the Federal Reserve System, viewed 2 May 2012, .The Parliament of the Commonwealth of Australia 2009, The Global Financial Crisis and regional Australia, Viewed 11 May 2012, .The Senate 2011, Competition within the Australian banking sector, Viewed 9 May 2012, .Viney, C 2009, Financial Institutions, Instruments Markets, 6th edn, McGraw- heap Education, Australi