Council of Financial Regulators Annual Report – 1998 Appendix C
Type of Institution |
Main Supervisor/ Regulator |
Main Characteristics |
No. of Active Institutions(a) |
Total Assets(b) ($b) |
|---|---|---|---|---|
| Banks | APRA | Provide a wide range of financial services to all sectors of the economy, including (through subsidiaries) funds management and insurance services. Foreign banks authorised to operate as branches in Australia are required to confine their deposit-taking activities to wholesale markets. | 45 | 621a |
| Non-bank financial intermediaries | ||||
| Building societies | AFIC(b) | Building societies raise funds primarily by accepting deposits from households, provide loans (mainly mortgage finance for owner-occupied housing) and payments services. Traditionally mutually owned institutions, building societies increasingly are issuing share capital. | 20 | 12 |
| Credit unions | AFIC(b) | Mutually owned institutions, credit unions provide deposit, personal/housing loan, and payment services to members. | 234 | 19 |
| Money market corporations (‘merchant banks’) |
ASIC(c) | Operate primarily in wholesale markets, borrowing from, and lending to, large corporations and government agencies. Other services, including advisory, relate to corporate finance, capital markets, foreign exchange and investment management. | 55 | 68 |
| Finance companies (including general financiers) | ASIC(c) | Provide loans to households and small to medium-sized businesses. Finance companies raise funds from wholesale markets and, using debentures and unsecured notes, from retail investors. | 98 | 62 |
| Securitisers | Special purpose vehicles that issue securities backed by pools of assets (eg mortgage-based housing loans). The securities are usually credit enhanced (eg through use of guarantees from third parties). | 58 | 37 | |
| Other non-bank intermediaries | Include pastoral finance companies, Special Service Providers, co-operative housing societies and intra-group financiers. | n.a. | 10 | |
| Funds managers and insurers | ||||
| Life insurance companies |
APRA(d) | Provide life, accident and disability insurance, annuities, investment and superannuation products. Assets are managed in statutory funds on a fiduciary basis, and are mostly invested in equities and debt securities. | 45 | 166 |
| Superannuation and approved selfdeposit funds (ADFs) – outside of life insurance companies | APRA | Superannuation funds accept and manage contributions from employers (incl. self-employed) and/or employees to provide retirement income benefits. Funds are controlled by trustees, who often use professional funds managers/advisers. ADFs are generally managed by professional funds managers and, as with super funds, may accept superannuation lump sums and eligible redundancy payments when a person resigns, retires or is retrenched. Superannuation funds and ADFs usually invest in a range of assets (equities, property, debt securities, deposits). | 179,509 | 241 |
| Public unit trusts | ASIC(c) | Unit trusts pool investors' funds, usually into specific types of assets (eg equities, property, money market investments, mortgages, overseas securities). Most unit trusts are managed by subsidiaries of banks, insurance companies or merchant banks. | 501 | 110 |
| Trustee companies (common funds) | State authorities | Trustee companies pool into common funds money received from the general public, or held on behalf of estates or under powers of attorney. Funds are usually invested in specific types of assets (eg money market investments, equities, mortgages). | 14 | 8 |
| Friendly societies | AFIC/State Supervisory Authorities(b) |
Mutually owned co-operative financial institutions offering benefits to members through a trust-like structure. Benefits include investment products through insurance or education bonds; health; funeral; accident; sickness; or other benefits. | 74 | 7 |
| General insurance companies | APRA(d) | Provide insurance for property, motor vehicles, employers' liability, etc. Assets are invested mainly in deposits and loans, government securities and equities. | 110 | 79(e) |
| (a) Refers only to the Australian banking operations and does not include
assets of banks' overseas branches or domestic and foreign non-bank
subsidiaries. Banks' global consolidated group assets at December 1998
were $812 billion.
(b) Supervisory responsibilities for the Financial Institutions Scheme are expected to pass to APRA from State jurisdictions some time in 1999. (c) ASIC does not conduct prudential supervision of these institutions, but does regulate certain aspects of their operations (eg compliance with the fundraising and securities licensing provisions of the Corporations Law). (d) State Government-owned insurance offices are not covered by Commonwealth legislation, nor supervised by APRA. (e) Estimate n.a. not available |
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