1. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 1 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson Chapter 3 Non-bank Financial Institutions (NBFIs) Websites: http://www.apra.gov.au

2. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 2 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson Learning Objectives Understand the role of NBFIs in the financial system Outline the financial products and services provided by NBFIs Describe NBFI’s principal sources and uses of funds Examine the regulatory system

3. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 3 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson Chapter Organisation 3.1Introduction 3.2Investment and Merchant Banks 3.3Life Insurance Offices 3.4General Insurance Offices 3.5Superannuation Funds 3.6Finance Companies and General Financiers

4. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 4 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson Chapter Organisation (cont.) 3.7Permanent Building Societies 3.8Credit Cooperatives 3.9Managed Funds 3.10Export Finance and Insurance Corporation 3.11 Summary

5. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 5 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.1 Introduction NBFIs can be differentiated by their source and use of funds, OBS business and regulation

6. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 6 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson Chapter Organisation 3.1Introduction 3.2Investment and Merchant Banks 3.3Life Insurance Offices 3.4General Insurance Offices 3.5Superannuation Funds 3.6Finance Companies and General Financiers

7. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 7 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.2 Investment and Merchant Banks Evolved under regulation Officially classified as ‘money market corporations’ (not authorised banks) – Size of balance sheet not constrained by capital adequacy requirements Primarily deal in wholesale finance

8. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 8 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.2 Investment and Merchant Banks (cont.) Sources of funds – Mainly offshore money market securities Uses of funds – Primarily short-term loans to corporations and government – Little direct involvement in household sector except through cash management and unit trust products

9. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 9 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.2 Investment and Merchant Banks (cont.) Other activities – Deregulation has allowed banks to move into merchant bank activities – This led money market corporations to develop their OBS business  Provide advice, management services and funding arrangements for Mergers and acquisitions – Takeover company seeks to gain control over a target company

10. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 10 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.2 Investment and Merchant Banks (cont.) Other activities (cont.) – Project finance and structured finance  Lending for large projects where loan repayments are based on projected cash flows – Securitisation  The conversion of non-liquid assets into new assets- backed securities that are serviced with cash flows from the original assets

11. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 11 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson Chapter Organisation 3.1Introduction 3.2Investment and Merchant Banks 3.3Life Insurance Offices 3.4General Insurance Offices 3.5Superannuation Funds 3.6Finance Companies and General Financiers

12. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 12 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.3 Life Insurance Offices (cont.) Sources of funds (cont.) – Examples of policies  Whole-of-life  Endowment  Term-life  Total and permanent disablement insurance  Trauma insurance  Income protection insurance  Business overheads insurance

13. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 13 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.3 Life Insurance Offices (cont.) Uses of funds – $200 billion managed by life offices as at December 2001  50% held in equities and unit trusts  14% invested in long-term securities  15% invested overseas Regulation  Supervised by APRA which applies the same capital and liquidity management requirements as that of banks

14. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 14 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson Chapter Organisation 3.1Introduction 3.2Investment and Merchant Banks 3.3Life Insurance Offices 3.4General Insurance Offices 3.5Superannuation Funds 3.6Finance Companies and General Financiers

15. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 15 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.4 General Insurance Offices Company pays the insured a pre- determined amount on the occurrence of some pre-specified event Sources of funds – Premiums paid in advance (contractual) – Funds source not as stable as for life offices – Examples of policies  House and content, motor vehicle

16. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 16 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.4 General Insurance Offices Company pays the insured a pre- determined amount on the occurrence of some pre-specified event Sources of funds – Premiums paid in advance (contractual) – Funds source not as stable as for life offices – Examples of policies  House and content, motor vehicle

17. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 17 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.4 General Insurance Offices (cont.) Uses of funds – Generally shorter term, highly marketable securities, due to the less predictable nature of the risks underwritten – Examples  Money market securities like bills of exchange, commercial paper, certificates of deposit and Treasury notes Prudential supervision by APRA

18. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 18 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson Chapter Organisation 3.1Introduction 3.2Investment and Merchant Banks 3.3Life Insurance Offices 3.4General Insurance Offices 3.5Superannuation Funds 3.6Finance Companies and General Financiers

19. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 19 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.5 Superannuation Funds Savings accumulated to fund an individual’s retirement A range of providers manage superannuation funds  Life insurance offices  Specialist superannuation funds  Private businesses  Public corporations  Governments

20. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 20 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.5 Superannuation Funds (cont.) Total superannuation assets exceed $520 billion Sources of funds – From member’s contribution into either  Employee-sponsored funds Superannuation fund established by an employer for the benefit of employees  Private (or personal) superannuation funds Superannuation savings plan or single-premium scheme

21. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 21 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.5 Superannuation Funds (cont.) Sources of funds (cont.)  Compulsory superannuation funds Superannuation Guarantee Charge (SGC) – Phased in between 1992 (3−4%) and 2002 (9%) whereby employers provide a required level of superannuation for their employees into a complying superannuation scheme Uses of funds  Highly diverse investments  Large proportion in equities and unit trusts  Approximately 20% invested overseas

22. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 22 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.5 Superannuation Funds (cont.) Types of superannuation funds – Capital guaranteed Value of initial investment guaranteed – Capital stable Initial investment is secured, but not explicitly guaranteed – Balanced growth Targets a longer term income stream supported by capital growth

23. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 23 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.5 Superannuation Funds (cont.) Types of superannuation funds (cont.) – Managed growth or capital growth Seeks greater return through capital growth and less through income stream Regulation – Legislation directly impacting on the operation of superannuation funds Superannuation Industry (Supervision) Act 1993 (Cwlth) (SIS) Income tax Assessment Act 1936

24. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 24 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.5 Superannuation Funds (cont.) – APRA: responsible for prudential supervision – ASIC: responsible for market integrity and consumer protection of products – Concessional tax treatment of complying superannuation funds 15% tax rate applied to fund contributions and earnings Reasonable Benefit limit (RBL) is the amount of concessionally taxed superannuation funds allowable, based on lump sum and pension limits

25. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 25 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson Chapter Organisation 3.1Introduction 3.2Investment and Merchant Banks 3.3Life Insurance Offices 3.4General Insurance Offices 3.5Superannuation Funds 3.6Finance Companies and General Financiers

26. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 26 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.6 Finance Companies and General Financiers Industry structure – Emerged largely due to previously highly regulated banking sector to circumvent restrictions on interest rates and lending – Sector share of total assets has declined since deregulation from 13% in 1980 to less than 4% in 2002 – Sector dominated by bank-owned companies (e.g. AGC, Esanda, CBFC)

27. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 27 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.6 Finance Companies and General Financiers (cont.) Industry structure (cont.) – Manufacturer-affiliated examples include Ford Credit, RACV Finance Sources of funds – Most of the funds obtained from  Borrowings from related corporations  Loans from banks  Issue of debentures and unsecured notes  Borrowings from overseas

28. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 28 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.6 Finance Companies and General Financiers (cont.) Uses of funds – Lease financing – Loans to businesses (e.g. bills finance, term loans, floor plan financing, factoring and accounts receivable financing) Regulation – Financial Corporations Act 1974 (Cwlth) – Corporations Law 1989 (Cwlth) – Consultation and reporting to APRA

29. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 29 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson Chapter Organisation (cont.) 3.7Permanent Building Societies 3.8Credit Cooperatives 3.9Managed Funds 3.10Export Finance and Insurance Corporation 3.11Summary

30. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 30 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.7Permanent Building Societies (PBS) Industry structure – During regulation PBS gained market share at the expense of savings banks – Have had difficulty competing since deregulation of the financial sector – Many PBS have merged and some have become banks (e.g. Adelaide Bank) – Sector share of total assets only 0.6%

31. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 31 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.7 Permanent Building Societies (PBS) (cont.) Sources of funds – Mainly deposits from household sector Uses of funds – Mainly owner-occupier housing finance – Commercial loans Regulation – As authorised deposit-taking institutions (ADIs) regulation is the same as banks

32. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 32 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson Chapter Organisation (cont.) 3.7Permanent Building Societies 3.8Credit Cooperatives 3.9Managed Funds 3.10Export Finance and Insurance Corporation 3.11Summary

33. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 33 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.8 Credit Cooperatives Also known as credit unions Common bond of association often exists between members due to employment, industry or community (e.g. Shell Employees’ Credit Union) Sources of funds  Mainly deposits from members (payroll deductions)  Also issuance of promissory notes

34. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 34 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.8 Credit Cooperatives (cont.) Uses of funds (Jan 2002) – Primarily personal finance to members  Residential housing loans (52%)  Personal loans and credit card facilities (24%) – Liquid assets including cash, bank deposits and govt. securities (20%) – Sector share of total assets 1.25% Regulation – as an ADI, same as banks

35. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 35 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson Chapter Organisation (cont.) 3.7Permanent Building Societies 3.8Credit Cooperatives 3.9Managed Funds 3.10Export Finance and Insurance Corporation 3.11Summary

36. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 36 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.9Managed Funds Provide direct access to wholesale investment markets for pooled savings of individuals (not an intermediary) – Investors in the fund obtain a right to the assets of the fund and a share of the income and capital gains (losses) derived from those assets Managed Investments Act 1998 (Cwlth) requires – Responsible entity (trustee and manager) – Trust deed

37. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 37 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.9 Managed Funds (cont.) Sector share of total assets 40% Types of managed funds – Statutory funds of life offices – Superannuation and approved deposit funds – Cash management trusts – Common funds – Public unit trusts – Friendly societies

38. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 38 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.9 Managed Funds (cont.) Cash management trusts – Investment funds established under a trust deed, which specifies the trust’s investments – Generally invest in short-term money market instruments – Provide high liquidity for the investor (one-day’s notice) – Give small investors access to wholesale investment markets

39. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 39 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.9 Managed Funds (cont.) Public unit trusts – Investors purchase a share in the trust in the form of a ‘unit’ – The trustee pools the funds received from investors and invests them – Unit holders receive a return in the form of capital gain or income – Can be either  Listed Trusts: units quoted and sold on the ASX (highly liquid) – 34%  Unlisted Trusts: units bought and sold by trustee (less liquid) – 66%

40. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 40 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.9 Managed Funds (cont.) Public unit trusts (cont.) – Types of unit trusts include  Property trusts (31%)  Equity trusts (47%)  Mortgage trusts (4%)  Fixed interest trusts (18% approx.)

41. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 41 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson Chapter Organisation (cont.) 3.7Permanent Building Societies 3.8Credit Cooperatives 3.9Managed Funds 3.10Export Finance and Insurance Corporation 3.11Summary

42. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 42 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.10 Export Finance and Insurance Corporation (EFIC) EFIC is the official export credit agency It encourages export trade through the provision of trade insurance, and financial services and products

43. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 43 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.10 Export Finance and Insurance Corporation (EFIC) (cont.) Examples include – Risk of non-payment – Exposure to political risk – Guarantee of trade finance

44. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 44 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson Chapter Organisation (cont.) 3.7Permanent Building Societies 3.8Credit Cooperatives 3.9Managed Funds 3.10Export Finance and Insurance Corporation 3.11Summary

45. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 45 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.11 Summary NBFIs can be classified according to their assets and liabilities, and the type of services provided Money market corporations provide advisory services to corporations and government Life insurance and general insurance offices are contractual savings institutions which generate funds mainly on the receipt of premiums for insurance policies

46. Copyright  2003 McGraw-Hill Australia Pty Ltd PPT Slides t/a Financial Institutions, Instruments and Markets 4/e by Christopher Viney Slides prepared by Anthony Stanger 46 Copyright  2003 McGraw-Hill Australia Pty Ltd PPTs t/a Financial Accounting by Willis Slides prepared by Kaye Watson 3.11 Summary (cont.) Superannuation funds facilitate saving by individuals for their retirement Finance companies issue debentures and unsecured notes and lend to business PBS and credit unions receive deposits from individuals and lend for residential housing Managed funds provide access to wholesale investment markets for pooled savings EFIC provides insurance and financial services and products for exporters