Australia Banks

The Australian banks that provide financial services to the people of Australia today has revolutionized the financial industry in the country. In fact, the success of Australian banks also paved their way to extend their services and operations to the different parts of the world including Europe, Asia and the Pacific, and North America.

The activities of Australian banks and other Australian financial institutions such as insurance companies, credit unions, and superannuation companies are regulated by the Australian Prudential Regulatory Authority (APRA).

Saving Banks and Trading Banks

Before, the banks in Australia are divided into two different categories: the saving banks and the trading banks. A saving bank is a type of financial institution that focuses solely on mortgages. The financial transactions in a saving bank are restricted to lending money for mortgage loans. A trading bank, on the other hand, is a type of financial institution that is patterned after a merchant bank. It is a type of investment bank that focuses on private equity. A trading bank doesn't necessarily provide financial services to the Australian public.

Non-bank Financial Institutions

The regulatory restrictions on Australian banks resulted to the ubiquity of non-bank financial institutions in the country such as credit unions and building societies. Because credit unions and building societies are subjected to less sever regulations, they have the freedom to charge and to provide higher interest rates. The services that non-bank financial institutions can offer are also very restricted and quite limited.

Central Bank

The central bank is a monetary authority that is responsible for maintaining the stability of the national currency, controlling the fluctuation of loan interest rates, and conserving the equilibrium of money supply. In the event of a financial crisis, the central bank also acts as the lender to the banking sector. The supervision over the activities of different financial institutions is also a responsibility of the central bank.

Before its privatisation in 1996, the government-owned Commonwealth Bank of Australia acted as the central bank of the country. Since the arrangement of having a commercially-operated banking organisation as the central bank caused discomfort to some banks, the Commonwealth Bank of Australia was freed from its role as Australia's central bank. In 1961, the Reserve Bank of Australia became the country's new central bank.

Australia Banks

The Australian-owned banks that continues to provide the necessary financial services for the people of Australia include Adelaide Bank Limited, AMP Bank Limited, Australia and New Zealand Banking Group Limited, Bank of Queensland Limited, BankSA, BankWest, Bendigo Bank Limited, Commonwealth Bank of Australia, Commonwealth Development Bank of Australia Limited, Elders Rural Bank Limited, Macquarie Bank Limited, Members Equity Bank Pty Limited, National Australia Bank Limited, St. George Bank Limited, Suncorp-Metway Limited, and Westpac Banking Corporation.

The four biggest banks in Australia are the National Australia Bank, the Commonwealth Bank of Australia, the Australia and New Zealand Banking Group, and the Westpac Banking Corporation. A four pillars policy was created by the Australian government in order to prevent the four major Australian banks from merging.