Question Four Total 14 marks Required:

a. Describe the emerging and evolution of Australian central bank (The Reserve Bank of Australia), and the roles of the central bank. (6 marks)

b. Discuss the regulatory evolution on Australian financial sectors in 1970s to 1990s and the current financial regulatory framework (bodies) in Australia. (8 marks)

Question Five Total 10 marks Required:

a. What is the difference between loans sold with recourse and loans sold without recourse from the perspective of both sellers and buyers? (3 marks)

b. What is the difference between loan participations and loan assignments? (3 marks)

c. Explain reserve requirement, compensating balance, capital adequacy. (4 marks)

Question Six Total 18 marks Required:

a. What is securitization? How does it work (three major forms) in the U.S. financial market? (8 marks)

b. Discuss financial innovation, securitization, subordinate debts and the financial crises in U.S. in 2007 to 2008, and the impact on the world finance market and economy. (10 marks)