INTRODUCTION
The financial system in Australia can be thought of as having three overlapping components. The first consists of financial enterprises (such as banks) and regulatory authorities, the Reserve Bank (the central bank) and the Australian Prudential Regulation Authority. The second consists of financial markets (e.g. the bond market) and their participants (issuers such as governments, and investors such as superannuation funds). The third is the payments system - that is, the cash, cheque and electronic means by which payments are effected - and its participants (e.g. banks). The interaction of these components enables funds for investment or consumption to be made available from savings in other parts of the national or international economy.
This chapter provides a summary of the structure and activities of the three components of the Australian financial system.
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