1. Outline the role of residential mortgage securitization in the US subprime crisis. 2. How did ratings agencies contribute to the financial crisis? 3. Identify the trends in the sector balances in the Australian flow of funds since 1998. 4. What impact did the GFC have on the Australian financial services sector? 5. What is the role of the financial system and why is it important to the economy? 6. Explain what is meant by the term ‘financial intermediation’. 7. What would be the implications for investment in physical assets such as oil refineries or long-distance telephone cable if financial intermediaries were not willing to invest money for long periods? 8. What is the difference between primary and secondary markets? 9. Compare and contrast money and capital markets. 10. Outline the major risks faced by financial institutions. 11. What are some problems with direct financing that make indirect financing more attractive? 12. Explain the concept of financial intermediation. How does the possibility of financial intermediation increase the efficiency of the financial system? 13. Discuss the primary functions that the RBA performs in the Australian financial system and how these relate to achieving its overall responsibilities set out in its charter. 14. How is an increase in the cash rate likely to affect mortgage interest rates, imports, the exchange rate, and inflation? 15. Why is a repo like a secured loan? 16. List and describe three types of hybrid securities and the features they might have. 17. Define the following terms as they relate to secondary markets: depth, breadth, and resiliency. 18. What were the main causes of the financial crisis? 19. What are the major regulatory bodies in the Australian financial system and what are their main roles? 20. Outline the development of central banking in Australia from the CBA, formed in 1912, to the RBA as we know it today.
21. Explain the sense in which the RBA is