Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter
subscribe to our newsletter

APRA boss reveals FSI stance

Competition and stability are not "mutually exclusive", argues APRA chair Wayne Byres, although too much competition can be destructive.

Mr Byres was speaking at a Centre for International Finance and Regulation workshop on the Financial System Inquiry's final report in Sydney last week.

The APRA boss said the FSI's recommendations in relation to competition were "perfectly fine and perfectly sensible".

Advertisement
Advertisement

"I don’t have any concern with the perspectives that the FSI put, which is [that APRA and ASIC] should increase the prominence that we give to considerations around competition," he said.

However, as it considers the FSI final report, the government ought to think carefully about the relationship between competition and stability, Mr Byres said.

"We shouldn’t pretend that competition and stability are mutually exclusive, or that we necessarily have to trade off one for the other," he said.

"Like all things, if you have too much or too little of something it’s often a bad result."

It is possible to have too much competition within a financial system, he said, pointing to "a number of global banks in 2006/2007" as proof.

Closer to home, the demise of Australian insurance company HIH is a telling example, Mr Byres said.

"[HIH] was a very competitive organisation before it drove itself into the ground," he explained.

Consequently, it is counter-productive for a financial system to be at either end of the competition/stability "spectrum".

"We shouldn’t think that there has to be a trade-off. Sustainable competition can also deliver financial stability, and that's in the best interests of everyone," he said.

APRA boss reveals FSI stance
mortgagebusiness

Latest News

A major insurance provider has announced that it would restrict its offering of lender’s mortgage insurance in light of emerging risks ass...

Lenders will be allowed to extend their pre-approval period for borrowers using the First Home Loan Deposit Scheme given the coronavirus pan...

The federal government has announced several changes to the Takeovers Panel, which include the reappointment of an ANZ executive and the ap...

FROM THE WEB
podcast

LATEST PODCAST: Further relief for SMEs and borrowers

Do you think Australia will move to quantitative easing this year?

Why we’ll keep delivering for our communities in the face of COVID-19

alex

As Australia tries to keep pace with a rapidly changing business and social landscape in the wake of COVID-19, Momentum Media is leading the way delivering essential content to our communities, writes Alex Whitlock, director of Mortgage Business.

Read more

Website Notifications

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