Financial System Between Australia and Singapore

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This research essay is done for the purpose to compare and contrast the financial system between two countries chosen which are Australia and Singapore. This research essay is mainly concentrate on different types of institutions in the financial system and the role they play. Moreover, the different types of institutions in different countries will then compare in order to analyze the similarity and differences.

There are three sections consists in this research essay. The first section stressed on the central bank in Australia, the Reserve Bank of Australia (RBA) and the central bank in Singapore, the Monetary Authority of Singapore (MAS). First of all, the history of central bank of each country was discussed in order to view how
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MAS then take over the task to regulate the insurance industry in April 1977 and the function of Security Industry in September 1984. MAS continued to take over the responsibility of money issuance starting from October 2002. (MAS 2010)

Reserve Bank of Australia (RBA) is the central bank of Australia. RBA was formed in 1959 to replace Commonwealth Bank of Australia. Commonwealth Bank was set up by the Federal Government in 1911. RBA is responsible to take over central banking roles that previously taken care by Commonwealth Bank. After the take over, RBA keep improving their banking system and provide different banking services. The role of RBA is to perform the monetary policy in order to preserve a strong financial system and subject to the Australian Dollar’s currency.

Functions of the Central Bank

Government’s Financial Agency

MAS and RBA have been actively involved in few functions in the banking environment. As a central bank, MAS and RBA is also known as the Government bank. A government bank serves as the banker or financial agent of the government. The government and the departments within the government bodies are basically the major customer to central bank. According to the Economics Explorer of Singapore, the central banks provide the government with the current account and other financial infrastructures. It improves and manages
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