9007FMI: Financial Markets and Institutions- RBA Joins Race to the Bottom- Report Writing Assignment

Internal Code: 1HHEA

Report Writing Assignment:

Task: You are required to select a central bank responsible for monetary policy in a country of your choice. Click on the link for a list of central banks: http://www.bis.org/cbanks.htm For this assignment, you are required to prepare a report. Your report must address following:

1. Discuss the role of a central bank in a country, particularly in implementing monetary policy. Comment on any regulatory requirements imposed on the central bank in performing their responsibilities.
2. Comment on the current economic environment (inflation and interest rates) of your selected country, monetary policy employed by the central bank, and effects of those monetary policies on financial markets including asset values and yields.
3. In the article ‘RBA joins race to the bottom’ (Greber& Shapiro 2016) the Reserve Bank of Australia Governor (RBA) refers to taking a medium - term view to achieve the CPI inflation target, importance of asset prices and that leveraged dynamics matter. Outline and discuss why the RBA Governor thinks leverage matters. Explain the relevance of this statement to central bank practice in your country?
4. Identify and discuss how Authorised Deposit Institutions (ADIs) deal with credit, liquidity, operating and interest rate risks in the selected country. Comment on how Basel accord ii or iii helps deal with capital and liquidity risks in your selected country.