Australian banks not immune

Australia’s regulatory system may have weathered the global financial crisis better than most, but that does not mean it should be immune from further reform, according to the Australian Prudential Regulation Authority (APRA).

Wayne Byres, APRA executive general manager of the Diversified Institutions Division, has told a conference that APRA’s position is “that it is both pointless and unhelpful to try to stand against the tide of international reform”.

“We are a small, open economy participating in a global financial system, and any attempt to declare independence from the rest of the world will inevitably be counterproductive,” he said.

Byres said that whilst ever the Australian banking system was reliant on offshore funding, it was vital that Australia be seen to be playing by the international rules of the game.

“Whatever the merits of the Australian banking system and its regulatory framework, in the midst of the crisis the rest of the world did not distinguish a great deal between our banks and those elsewhere,” Byres said.