Reserve Bank points to challenges for finance sector
|
|
The Reserve Bank (RBA) has sent a message to financial institution that they are going to have to focus more intently on the adequacy of their funding liquidity over longer time horizons.
The Governor of the Reserve Bank, Glenn Stevens, used an address to Sydney economists last night to point out that efforts were underway globally with respect to introducing a new global standard for funding liquidity.
“This is likely to require financial institutions to focus on adequate funding liquidity over longer time horizons, as well as resilience to more demanding stress scenarios,” he said.
Stephens also pointed to the fact that other financial entities such as hedge funds which had escaped close regulatory scrutiny were now being subjected to more oversight.
“The regulatory perimeter is being extended,” he said. “Some of the relatively less supervised institutions that were problematic prior to the crisis no longer exist — for example, US investment banks failed, or were converted into, or assumed by, regulated banks.
“But other institutions whose actions could on occasion be of systemic importance, such as hedge funds, are being subjected to more oversight,’ Stevens said.
The Reserve Bank Governor also pointed to the problems associated with financial institutions deemed “too big to fail” and canvassed the possibility of a tax being imposed based on size or, alternatively, more intrusive regulation.
He said either way, furious lobbying from the finance sector could be expected.
AUTHOR
Mike Taylor
Recommended for you
Net cash flow on AMP’s platforms saw a substantial jump in the last quarter to $740 million, while its new digital advice offering boosted flows to superannuation and investment.
Insignia Financial has provided an update on the status of its private equity bidders as an initial six-week due diligence period comes to an end.
A judge has detailed how individuals lent as much as $1.1 million each to former financial adviser Anthony Del Vecchio, only learning when they contacted his employer that nothing had ever been invested.
Having rejected the possibility of an IPO, Mason Stevens’ CEO details why the wealth platform went down the PE route and how it intends to accelerate its growth ambitions in financial advice.
