Questions on Bond Markets and Regulation of Financial Institutions
Paper, Order, or Assignment Requirements
When answering the questions below please do not rewrite the questions. Discuss the statements in brief since it should be just 2 pages long.
Discuss in brief the following statements;
The first three questions are on the Bond Markets.
1)Bond issuances by Australian corporates are typically made through public offerings within Australia while private placements are made mainly in offshore markets.
2)Hybrid securities have the characteristics of both equity and debt.
3)Financial guarantees are undertakings to cover the payment of principal and interest to investors in debt securities in the event of a default by issuers.
The next four questions are on the Regulation of Financial Institutions.
4)failure of a financial institution can have significant economic and social consequences. These consequences can reach far beyond the failed institution given the interdependence between institutions and the impact that a failure can have on market confidence(contagion risk).
5)Robust regulations and regulatory authorities are critical to the stability and efficiency of a financial system.
6)ARPA(Australian prudential regulation authority)adopts a risk-based, forward looking approach to its prudential supervision framework.
7)Basel accord is the key international agreement on financial institution risk management. Basel III, which strengthens liquidity and capital requirements in response to the GFC(global financial crisis) is scheduled to begin to be implemented in Australia from 1 January 2013.