The expanded funding will enable ASIC to address major bank misconduct and has been backed by the Australian Bankers’ Association (ABA) which said the move will ensure accountability is upheld across the financial sector.
“We support the introduction of a new industry funding model for ASIC,” ABA chief executive Steven Munchenberg said.
“It’s important that contributions are transparent and that the amount of fees levied matches the level of regulation and resources required for ASIC.”
Mr Munchenberg said aligning the new funding model with the expanded role of ASIC will also be important to ensure regulation is effective and efficient.
“The extension of Mr Greg Medcraft’s term as chair will help continuity with the range of reforms affecting the banking and financial services industry, in particular the implementation of recommendations from the Financial System Inquiry,” he said.
The Credit and Investments Ombudsman (CIO) also welcomed the announcement from the federal government.
Chief executive officer Raj Venga said he was pleased to see the recognition of the role played by external dispute resolution (EDR) schemes in financial services. He said it is important to ensure consumers and small businesses will be able to have disputes resolved efficiently and at no cost to them.
“We are an important part of Australia’s consumer protection framework and deliver tangible benefits to consumers, our members and the financial system as a whole,” Mr Venga said.
“We are also committed to continuous improvement and look forward to working with the panel to identify where there might be scope to enhance the services we provide.”
Meanwhile, the Customer Owned Banking Association (COBA) said any additional funding to ASIC should only be paid for by those responsible for the bad behaviour.
“We will always support measures that require regulators to give greater priority to promoting competition and consumer choice but the customer-owned model isn’t part of the problem, it’s actually part of the solution for consumers with an appetite for trusted banking services,” COBA chief executive officer Mark Degotardi said.
“We shouldn’t have to pay for fixing problems we haven’t caused. The customer-owned banking model is the only one that can be relied upon to put customers first.
“We agree ASIC should be given the resources it needs to tackle major bank misconduct but the only sustainable solution to addressing the endless scandals is a more competitive banking market. Increasing regulator funding will not by itself address the real problem.”
Mr Degotardi added that the most effective way to make significant positive change is to urgently implement the FSI reform agenda on resilience and competition in banking.
[Related: Banks to fund ASIC mortgage probe]