APRA taking action, it says
The Federal Government says APRA can do its job properly, despite a detailed report showing it is not.
An independent review has found the Australian Prudential Regulation Authority (APRA) is too secretive, unwilling to challenge itself and slow to respond to problems.
The report included staff accounts criticising their leadership for not forcefully taking on financial institutions.
They also raised a range of culture and governance issues.
APRA chair Wayne Byres said the body needs more funding to meet community expectations.
Treasurer Josh Frydenberg has pointed to the Government’s $200 million boost to the watchdog's funding last year.
“What we'll do is always ensure the organisation is properly resourced, and we will consider in the next budget any other further requests,” he said.
“But APRA is moving from having just over 600 staff to over 700 staff this year, and we will ensure it's not only got the right legislative tools and the right penalties in place, but also the right resourcing.”
Mr Frydenberg says Mr Byres has assured him that APRA is already dealing with changes.
The treasurer called on APRA to embrace more technological measures, cyber security, and transparency with its meetings with banks.
He focused in particular on the superannuation sector, which is divided over whether to the financial regulator enhanced policing powers.
Industry Super Australia wants a stronger APRA, while the Association of Superannuation Funds of Australia says a shift in focus could be damaging if not implemented “carefully”.
Former ACCC chair Graeme Samuel led the review, which was launched in the wake of the banking royal commission.
“APRA appears to have developed a culture that is unwilling to challenge itself, slow to respond and tentative in addressing issues that do not entail traditional financial risks,” the report says.
“APRA needs to shift the dial towards a more strategic and forceful use of communication to ensure that it maximises its impact with regulated entities.”
The report suggested setting up a new division entirely focused on superannuation, to ensure the system performs for its members.
APRA says it supports all of the 19 recommendations in the report directed at it, and is already working on several of them as part of its current Corporate Plan.
Additionally, the Federal Government has agreed to take action on all five of the recommendations directed to it, which can be viewed here.