The Role Of Financial Assignments Towards Financial Sector Analysis
Task: How Financial Assignment Helps Establish the Role Of Financial Sector Oligopoly
Part 1: Introduction
This Financial Assignment will analyse sectors abd determine their importance to perform the activities. Finance is the backbone of the society of any country. It has been observed that the better the financial sector the better it is for the country. The Australian financial sector is very interesting as it has a cosy banking oligopoly. The Financial Assignment will show the problems and the solutions of the problems that have risen due to the problem that was created due to that situation. These are essential for the people to perform the research and understand the activities properly. The Financial Assignment will provide all the information related to the situation of cosy banking oligopoly.?
Part 2: Analysis
Oligopoly is a situation where there is a competition that is limited. In this kind of situation there are few sellers or producers and many buyers. It has been said that the Australian financial system is an oligopoly market where there are few and limited sellers or producers and many buyers (Pc.gov.au, 2019). This Financial Assignment highlights the importance of the Australian financial market. The advantages and disadvantages of oligopoly market will be presented below:
Advantages of Oligopoly
High Profit: The market where there is oligopoly, there will be very high profit for the companies present in that market. The reason behind this is that there are few sellers and many buyers.
Simple Choices: The choices present for the buyers are limited and simple and they need to choose from those handfuls of companies.
Better information of the Goods and Services: Proper information about the goods and services can be received as there are few companies selling those products.
Competitive Prices: Since, there are few sellers there is straight competition among them regarding the service and price of the product. The sellers need to provide the products at a price lower than its competitor.
Disadvantages of Oligopoly
Less Choice: The buyers get less choice of goods and services from the market as the options are less and need to satisfy with the things that are present.
Prices being fluctuating: Another disadvantage of oligopoly identified on this Financial Assignment is that the prices are not fixed and the companies can ask for any amount of money at any time. This increases the problems in the economy.
No competition: There is competition in the pricing, but the competitions of the products are very low as there are only few companies dealing in the market.
Difficult for new business: It becomes difficult for the new business to prosper in an oligopoly market as because there are few companies present and they cannot sell the product at a price sold by other companies (Opentextbc.ca., 2019).
From the above points it can be understood that it is very difficult for the people in an oligopoly market. The companies of the oligopoly market identified on his Financial Assignment go to any extent to sell their products and changing the pricing strategy of the market as well.
Australian Financial Market
The financial market of Australia is very developed but they are limited to some handful of companies. There are all types of products available in the Australian financial market like money, bonds, debt, foreign exchanges, derivatives and equities. There are very few banks and non-banking financial corporations present in Australia those provide services to their people. This shows that there is an oligopoly market in the country of Australia. The people of Australia need to satisfy with the rates at which they get services from the financial markets. Since, there is only few service providers, the people need to satisfy their needs by taking the service from those institutes that are present.
The market of Australia is very much stable but there is a change in the financial sector as the market is an oligopoly market. The reason behind this is that there are few institutes who look after the finance, due to which the customers do not get any other alternatives to use the financial market. These make the financial institutes to fix any kind of high rates for any kinds of loan which needs to be paid to the banks if any kind of loans are to be taken. These bring in problems for the general public. As there are no other alternatives present tat can be used by the people they need to visit the banks and other institutes that are present. There are number of problems and issues that rise due to the conditions of oligopoly. These will be provided below:
1. There are very few companies in the financial sectors and the conditions of the banking systems are very bad as because they do not care.
2. It has been observed that the financial sector do not have any fixed rate to calculate all the activities that are provided by them.
3. There are very few choices for the people of Australia from whom they can take the services and they need to take the services no matter what the condition is.
Essential problems discussed on the Financial Assignment that are found in the market of finance in Australia. These are very important for the financial systems to take control of the situation to bring out the situation so that the people do not face any kind of problems. Here, only the buyers get affected, which causes lot of problems for them. It is also observed that the people need to use those services from those institutions or else they cannot get the services in Australia (Treasury.gov.au, 2019). Being the backbone of the country, there needs to be a good structure that can help the general public to get proper benefit from the banks and other financial institutes that are present. The Government should encourage the public to in bringing in new banks so that there can perfect competition in the market and the rates get reduced so that the people can enjoy the services of the banks. These are essential for the Government to undertake so that they can have complete control over the activities that are performed by the financial institutes. This will enable good service for the people of Australia.
Figure 1: Graphical representation of oligopoly market
(Source: Created by the Learner)
There needs to be a special board that needs to be directed by the Finance Minister of the country so that the Government can make the necessary steps in order to control all the activities of the financial institutes. This will make the financial services more protective as the Government is also associated with the financial systems. This can give trust to the general public and they perform the financial activities more. This will allow the Government to increase the revenue from the general public as well. The marketing conditions will also change as there will be use of good things for their business. The cosy oligopoly market is necessary to get change in order to bring in development for the system in the financial sector as well. This is the main sector discussed on this Financial Assignment that needs definite change in their system. These are essential for the market to take the control and bring some reforms so that those issues can be solved. These reforms will be provided below:
- The financial sector of Australia needs to have fixed rates for all the services that are provided by them and that needs to be controlled by the Government of Australia so that they can change things according to the needs.
- The financial sector of Australia needs to make the market open so that there can be more institutions situated in the market in order to provide more service to the people of Australia.
- A head institution needs to be present that will be headed by the finance minister of Australia so that all the activities can be tracked and controlled by them in order to have proper services in the market (Investopedia., 2019).
- The financial institutes on this Financial Assignment are paramount towards identify ways through which they can provide better service so that the customers do not get any kind of problems in the working of the institutions.
The above solutions need to be used in the financial sectors so that the problems can be solved and the banking sector can be given a new shape and the cosy market of oligopoly can be removed. These are essential parts of the country that is necessary to be given proper care so that the people do not get affected in the whole process. There are four solutions that are provided in the report that shows that there is a necessity to bring in certain changes that will help the people to have proper services.
The Government needs to ensure that there is proper security in the country in relation to the financial sector so that the people can trust the services and there can be proper control over the financial sector as well. This will reduce any kind of fraudulent activities that can affect the whole system drastically. These are essential for the country of Australia to have proper look at the various activities performed by them. The trust of the people is very important that needs to be brought in a proper manner. The Government needs to take the necessary measures in order to have proper functioning in the market. These are beneficial for the company as well. There are various purposes that needs to be fulfilled by the government so that the issues can be reduced. There are constant complaints that there are no regulations made to control the interest rates which are always fluctuating. This causes problems among the general public as well. These are essential for the country to have. It is necessary to have proper laws and rules that are necessary for the financial sector to follow so that there are proper control over them by the Government. These enable them to perform well and make the country stronger than before. The organisations that are present in Australia will get better financial backups from the financial sectors with proper interest rates. The general public will be interested in taking loans from the financial sectors for various purposes if there are proper interest rates present. These will enable the financial market to prosper as well. These make the country stronger than before that also enable the organisations to grow. New organisations also comes up due to the fact that there are proper functioning of the banking systems so that they get proper loans from them. These boost the performance of the country.?
The above Financial Assignment shows that there are few problems in the Australian financial markets that are necessary for them to change in order to provide proper service to the people of Australia. To make the necessary changes, the Government of Australia needs to act so that there are no problems with the changes done by them. It is also necessary to fix the rates of the services provided by the financial sector so that the people do not face any kind of problems availing those services. These are essential as discussed on the Financial Assignment for the market to sustain and the public to become tension free so that both the parties are provided enough satisfaction.
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Investopedia. (2019). What are the most famous cases of oligopolies?.Retrieved 29 August 2019, from https://www.investopedia.com/ask/answers/010915/what-are-most-famous-cases-oligopolies.asp
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