This is a study of foreign-owned trading banks in Australia. It tries to establish whether the banking status - licence - has benefited them.
The first chapter is to review different types of financial intermediaries in Australia. In this chapter, we look at the alternatives available to foreign entities entering the Australian financial market, and their operations.
Chapter two looks at the development of Australian Financial System and its current environment, that allows us to understand what foreign entities are facing since they have begun operation in Australia.
Foreign entities are required to hold baking licence in order to carry on banking business in Australia, hence, chapter three is to summarize the terms and payments on licence. A detailed weighted average additional-cost on licence over other non-bank financial institutions (NBFIs) is computed, and a detailed analysis of losses-and- benefits on licence is also examined. This chapter leads us to chapter four, which is going to determine whether the banking licence is the first prize and the NBFIs status is the second prize.
In chapter four, empirical tests on performance of foreign-owned banks and foreign-owned merchant banks are carried out in order to determine whether the evidences support the argument that the licence does not benefit the foreign entities which operate in Australia.