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
The corporate regulator has announced its first adviser banning of the year with the permanent ban of a Queensland-based former adviser that was sentenced to seven years’ imprisonment.
The Australian financial advice industry has risen by more than 20 advisers this week, with nearly half joining WT Financial and Sequoia.
Two financial advice professionals have shared their tips for success when building an effective Professional Year program as more advisers look to bring on junior staff to their practices.
Numbers are in for 2024, with Wealth Data confirming how many advisers left during the calendar year and which business models saw the largest growth in terms of new licensees.
