This unit has wide application and may be used in workplaces, schools, adult and community learning organisations or Registered Training Organisations (RTOs) in order to build the financial literacy of learners. The unit may also be used as part of pre-vocational or new apprenticeship programs or as part of services provided by counselling or advisory organisations.

ELEMENT

PERFORMANCE CRITERIA

1. Describe what is meant by the Australian financial markets

1.1. Specific financial markets in Australia are identified and discussed

1.2. The purpose of financial markets and when they emerged in Australia is researched and discussed

1.3. The participants in the financial markets and the roles of banks and financial institutions as financial intermediaries are identified and their roles analysed and discussed

2. Explain the function and role of the Reserve Bank of Australia (RBA)

2.1. The role of the RBA as Australia's central bank is researched and discussed and contrasted with other banking institutions

2.2. The importance and effect of the RBA's monetary policy on the Australian economy and everyday consumers is researched and discussed

3. Explain Australia's monetary system

3.1. The various functions of money are explained and society's motivations for holding money are outlined

3.2. The monetary cycle within the economy and on a global scale and instruments traded on the short term money market are described

3.3. The impact of increases and decreases in the money supply and the importance of regulating the money supply of any country is analysed and discussed

4. Explain the key factors that influence the Australian economy

4.1. The role and impact of Commonwealth and State government actions on the economy is explored with reference to current events and issues

4.2. The impact of a change in domestic interest rates on different sectors of the economy is analysed and discussed

4.3. The impact of changes in consumer activity on the Australian economy is analysed and discussed

5. Describe the role of regulators

5.1. The main regulators of the financial system are identified

5.2. The role of each regulator in protecting investors and consumers and promoting confidence in the financial system is explained using examples

Required skills

communication skills to:

clearly explain Australia's financial system and markets

use questioning to develop clear understanding

liaise with others, share information, listen and understand

use language and concepts appropriate to cultural differences

IT skills to use internet information

literacy skills for interpreting relevant information

learning skills to maintain knowledge of the Australian financial system

Required knowledge

roles and relationships between participants within the Australian financial services industry, including banks and other financial intermediaries

relevant and current awareness of the Australian financial system and markets, and the economic environment

The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit

Evidence of the ability to:

develop awareness of the features and roles of the participants within the Australian financial system and markets

understand the monetary system

identify Australia's financial regulators and their role.

Context of and specific resources for assessment

Assessment must ensure:

competency is demonstrated in the context of the the range statement

access to and the use of a range of common office equipment, technology, software and consumables

access to information about Australia's financial system and other markets, basic economics, software and other relevant resources.

Method of assessment

A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit:

evaluating an integrated activity which combines the elements of competency for the unit or a cluster of related units of competency

verbal or written questioning on underpinning knowledge and skills

setting and reviewing simulations or scenarios

group discussion to determine and confirm understanding.

Guidance information for assessment

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

Financial markets in Australia can include:

bond market

equity or share market as traded on the Australian Securities Exchange (ASX)

derivatives markets

foreign exchange market

money market including the short term money market

options and futures markets.

The purpose of financial markets includes:

enabling participants to invest surplus funds by buying securities

enabling participants to raise required funds by issuing securities.

Participants in the financial markets may include

banks and non-banking financial institutions

investors:

corporations

individuals

local and international governments

speculators:

corporations

individuals.

The role of the RBA includes:

banker to the Commonwealth government, banks and other financial institutions

maintaining financial stability and regulating the Australian Payments System

managing government debt

regulating the payments system

setting and implementing monetary policy.

The effect of the RBA's monetary policy may include:

changes in interest rates

flow on changes to employment, prices and production levels

increases or decreases in the supply of money in the Australian economy

acting to avoid or minimise a systemic collapse of financial institutions.

The role of the RBA in regulating the Australian Payments System may include:

fulfilling its regulatory responsibilities by controlling risks and promoting efficiencies

participating in the financial system as banker to the Commonwealth government

providing facilities for final settlement of transactions.

The different functions of money may include:

as a means of exchange for acquiring goods and services

indications of relative values between goods and services

measure of liquidity.

Motivations for holding money may include:

precautionary demand for money to pay future expenses which may not be anticipated

speculative demand for money to be able to take advantage of future price changes in favour of the purchaser

transactions demand for money to pay everyday predictable expenses.

Instruments traded on the short term money market include:

bills of exchange

commercial bills

government bills

promissory notes

treasury notes.

Consumer activity may include:

applications for home loans

purchase of private health insurance

purchase of university education

purchase or building of residential accommodation

retail spending

tourism within Australia by Australians.

Main regulators in the financial system may include:

Australian Prudential Regulation Authority (APRA)

Australian Securities and Investments Commission (ASIC).

Unit sector

Financial literacy

This unit contains employability skills.