This unit may be applied within the context of a financial counselling role or within educational programs facilitated by financial counsellors or financial institutions within the context of improving consumer financial literacy.

ELEMENT

PERFORMANCE CRITERIA

1. Explain to customers the function and role of the Reserve Bank of Australia (RBA)

1.1. The role of the RBA as Australia's central bank is and differences between the RBA and other banking institutions is communicated to the customer

1.2. The importance and effect of the RBA's monetary policy on the Australian economy and consumer's personal finances is explained to the customer in plain language

1.3. The role of the bank in maintaining financial stability and regulating the Australian Payments System is explained to the customer

2. Outline the role of money and Australia's monetary base

2.1. Society's motivations for holding money and the various functions of money are identified and discussed with the customer

2.2. The impact of changes in the supply of money is explained to the customer in plain language

3. Outline the main features of the Australian financial markets

3.1. The purpose of financial markets and the major markets within the Australian financial markets are identified and communicated to the customer

3.2. The role of banks and financial institutions as financial intermediaries is discussed with customer

3.3. The role and function of the short term money market and types of products it deals in, are outlined in basic language for the customer

4. Provide information to the customer about regulation of the financial system

4.1. The role of independent regulation in the financial system and the main regulators of the financial system are identified and their roles discussed with the customer

4.2. Examples of the protection afforded individuals by the regulators are provided to the customer

Required skills

communication skills to:

clearly explain the Australian financial system and markets tocustomers and customers, using questioning and active listening as required and respondingwith empathy in sensitive cases

liaise with others, share information, listen and understand

use language and concepts appropriate to cultural differences

IT skills touse internet information

literacy skills for:

analysing information to ensure appropriateness to customer or customer needs, currency and accuracy

drafting documents for customers and customers

problem solving skills to identify any issues that have the potential to impact on the customer's understanding and develop options

organisational skills, including the ability to plan and sequence work

Required knowledge

the Australian financial system and markets and State of the economic environment

relevant industry codes of practice including:

Consumer Credit Code

Privacy Act

Credit Act

relevant State and Territory legislation regarding consumer credit issues and Judgement Debt Recovery Acts

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

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

translate complex information into plain language that may be understood by a variety of people with minimal financial market knowledge.

Context of and specific resources for assessment

Assessment must ensure:

competency is demonstrated in the context of the financial services work environment and conditions specified in the range statement either in a relevant workplace or a closely simulated work environment

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

access to Australian financial systemand markets information.

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

observing processes and procedures in workplaces or role plays

verbal or written questioning on underpinning knowledge and skills

setting and reviewing workplace projects and business simulations or scenarios.

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.

The role of the RBA includes:

banker to the Commonwealth government, banks and other financial institutions

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.

Maintaining financial stability refers to:

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.

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 every day predictable expenses.

The 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.

Thepurpose of financial markets includes:

enabling participants to invest surplus funds by buying securities

enabling participants to raise required funds by issuing securities.

The major markets within the Australian financial system include:

bond market

derivatives markets

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

financial futures market

foreign exchange market

money market

options market.

Instruments traded on the short term money market include:

bills of exchange

commercial bills

government bills

promissory notes

treasury notes.

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.