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

Consumers are more pessimistic about the economy following the Reserve Bank’s rate cut in June, according to new survey results. ...

The upper quartile of the housing market has suffered the sharpest declines in dwelling values, but according to CoreLogic, prices in that s...

The mutual bank has announced the introduction of a new investment home loan product. ...


LATEST PODCAST: A new record-low cash rate

Do you think the banking royal commission recommendations could negatively impact competition in the mortgage market?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.