Defined Terms and Documents

Financial Corporations Act (Cth) of 1974

During the 1960s the Commonwealth viewed the gradual contraction of the banks vis a vis the nonbank intermediaries with concern for the effectiveness of its monetary policies. The view that the management of aggregate demand required further control of the non-bank financial intermediaries gained ground, and resulted in the Financial Corporations Act (Cth) of 1974, which obliged financial corporations registered under state or territory legislation to supply information on their operations to the Reserve Bank and to the Commonwealth statistician.  The Act also provided that, in respect of financial corporations with total assets exceeding five million dollars, the Reserve Bank could promulgate regulations on asset ratios, the volume and direction of lending, and maximum interest rates. As it turned out, these powers have not been used.