APRA urges continuing bipartisanship on regulation
The Australian Prudential Regulation Authority (APRA) has signaled the need for continuing bipartisan support for the operation of Australia's financial services regulatory system, particularly at times when the regulators are required to take unpopular supervisory actions.
The signal has been sent by APRA executive general manager, Charles Littrell, who used an address to a Macquarie University event to say the regulators needed "moral support from government to take necessary but unpopular supervisory actions".
"My experience is that essentially all the prudential regulators in developed economies have at least reasonable budgets, and on paper they all have strong statutory powers. The essential differences in outcomes, however, tend to stem from the support or lack thereof that governments give regulators for proactive supervision," he said.
Littrell said that in Australia, for a very long time in banking and over the past decade in superannuation and insurance, there had been a strong bipartisan consensus that the financial system should be safe as well as dynamic.
"APRA has for many years felt confident that the Government and Parliament more generally support us, as we undertake our sceptical, intrusive, and where necessary aggressive supervision," he said.
Littrell said this was consistent with the approach seen in most of Asia, Canada, and the Nordic countries.
"It is less obvious in the United States and in some European countries. This latter group of countries suffered most from the financial crisis," he said.
Littrell described Treasury as being the critical agency to ensuring "successive generations of ministers understand that responsibility for the prudential regulator carries with it an inevitable level of complaint".
"There is a choice, however: ministers can receive more or less constant low-level grumbling from the financial industry about the alleged conservatism of the prudential regulator. Alternatively,
once a generation they can receive, often on their way out of office, complaints from millions of voters who have had their financial prospects destroyed by overly lax supervision of the financial sector."
Recommended for you
Advisers at DOD Bookkeeping, which received an $11 million penalty last week, received as much as 40 per cent of their remuneration via a bonus when clients purchased a property via a SMSF, according to court documents.
Private wealth manager Escala Partners has launched an end-to-end investment platform to strengthen its alternatives capability as clients seek sophisticated vehicles.
Perpetual Wealth Management has hired two advisers from Ord Minnett as part of five hires, just weeks after the rival firm announced it had picked up six from Perpetual Private.
ASIC has cancelled the AFSL of a Perth financial services firm following payments to its clients by the Compensation Scheme of Last Resort after a failed managed investment scheme.
