subscribe to our newsletter
Regulators not the sole stewards of good banking culture: APRA

Regulators not the sole stewards of good banking culture: APRA

The Australian Prudential Regulation Authority has responded to the Hayne commission interim report by saying that a good banking system is produced by good bankers and “can’t be left to regulators alone”.

In a speech at the Financial Services Institute of Australasia (FINSIA) Summit, APRA chairman Wayne Byres acknowledged that regulatory initiatives in the pipeline — accountability statements, remuneration restrictions, strengthened governance requirements, greater attention to organisational culture and more forceful enforcement — will drive change.

However, Mr Byres added that “the task to truly generate cultural change within the banking industry cannot be left to regulators alone”.

“As I have said on a number of occasions, regulators can play their part but cannot regulate a good culture into existence,” Mr Byres said.

“To borrow an apposite quote, ‘Good banking is not produced by good laws, but by good bankers’.”

Mr Byres acknowledged the findings of the Hayne commission interim report that regulators can and should do more to actively enforce standards of behaviour within the financial sector.

He added that APRA has traditionally examined cases of poor conduct as an indicator of risk, but not a direct prudential risk in and of itself, unless it was likely to jeopardise the stability of the system or an individual institution.

“We will clearly need to reflect on that approach,” Mr Byres said.

[Related: Regaining trust in financial sector ‘not the regulator’s job’: APRA]

Regulators not the sole stewards of good banking culture: APRA

Latest News

Introducing regulatory transcriptions on the application of default interest would “impede the flexibility” that “needs to be exercise...

A newly merged financial services entity has announced the appointment of Commonwealth Bank’s current general manager of business product ...

The prudential regulator has announced that its “enforcement strategy and infrastructure” will be reviewed by its recently appointed sec...


LATEST PODCAST: How bank ‘simplification’ is aiding the non-bank sector

Is enough being done to ensure responsible lending?