Unit 4: The Development of Banking in Australia

Question 1

What was the first bank in Australia?

Answer 1

Bank of NSW - established 1817 in Sydney

Question 2

What spurred the development of banking in Australia?

Answer 2

The discovery of gold in 1851 which led to the minting of Australia’s own gold coins.

Question 3

When was the banking crisis in the 1880s?

Answer 3

1893

Question 4

What did the Australian Notes Act of 1910 issue as the legal tender in Australia?

Answer 4

The Australian pound

Question 5

What decade was the Great Depression in?

Answer 5

1930s

Question 6

Did the Great Depression bring a string of bank failures?

Answer 6

Yes

Question 7

After the great depression, when banking in Australia was very tightly regulated, there were two kinds of bank - Savings banks and Trading banks. What was the difference between these?

Answer 7

1. Savings banks paid virtually no interest to depositors and their lending activities were restricted to providing mortgages.
2. Trading banks were essentially merchant banks, which did not provide services to the general public.

Question 8

From the 1900 - 1950s when banking was tightly regulated, what ADIs flourished?

Answer 8

Building societies and credit unions.

Question 9

When was the Reserve Bank of Australia created?

Answer 9

14 January 1960

Question 10

When was the distinction and separation of savings and trading banks removed?

Answer 10

By the mid-1960s

Question 11

When were ATMs rolled out?

Answer 11

1969

Question 12

What prompted ATM rollout?

Answer 12

Banks sought to reduce operating costs

Question 13

When did former treasurer announce the Financial System Inquiry (FSI)?

Answer 13

2013

Question 14

What was the purpose of the Financial System Inquiry (FSI)?

Answer 14

To ensure an efficient competitive and flexible financial system in the future.

Question 15

What were the five themes of the Financial System Inquiry (FSI)?

Answer 15

1. Strengthen the economy through a more resilient financial system.
2. Raise the value of the superannuation system (including retirement incomes).
3. Drive economic growth and productivity through promoting innovation.
4. Enhance confidence and trust by creating a fair environment.
5. Enhance regulator independence and accountability (to reduce the need for future regulation)

Question 16

When was the Better Banking Program launched?

Answer 16

2017

Question 17

What were some main initiatives of the Better Banking Program?

Answer 17

1. Independent review of remuneration
2. Independent review of the BCoP
3. Protecting whistleblowers

Question 18

When was the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry established?

Answer 18

December 2017

Question 19

Why was the Royal Commission established?

Answer 19

To inquire into misconduct in the banking, superannuation and financial services industry

Question 20

What prompted the establishment of the Royal Commission?

Answer 20

1. Media revealed culture of greed in Australian financial institutions.
2. Parliamentary inquiry recommended Royal Commission, noting a lack of regulatory intervention.

Question 21

When were the final Royal Commission report and the government’s response to the report made public?

Answer 21

February 2019