Reform plea for banking overseer

THE banking watchdog is too secretive, “unwilling to challenge itself” and slow to respond to problems, with an independent report demanding a major shake-up.

The review slams the Australian Prudential Regulation Authority for its low profile and slow decision-making, and calls for an overhaul of its organisational structure.

But APRA chair Wayne Byres insisted his organisation was already changing and played down concerns about the culture that allowed banks to rip off Australian customers.

Former consumer watchdog boss Graeme Samuel led the review after the regulator was slammed in 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 said.

“There are good reasons for a prudential regulator to be discreet, particularly in cases of acute financial stress.

“However, 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 also said a division entirely focused on superannuation was needed to oversee how the system performs for its members.

Mr Byres said APRA was already dealing with changes but argued the organisation needed more funding to handle the expectations of the community.

“It does, quite fairly, make the point that we have more to do. We need to go further and faster in many areas,” he told reporters yesterday.

Anonymous staff told the review that APRA should be more forceful in taking on financial institutions, and others felt like managers wouldn’t back them, but Mr Byres played down those concerns.

APRA APPEARS TO HAVE DEVELOPED A CULTURE THAT IS UNWILLING TO CHALLENGE ITSELF, SLOW TO RESPOND GRAEME SAMUEL

“Getting the range of comments that you see here, it’s not unexpected, there’s always a range of views in APRA,” he said.

Centre Alliance senator Rex Patrick told Sky News Mr Byres should step down from his role after five years in charge.

All 24 report recommendations have been accepted, including 19 for the regulator and five directed at government.

Recommendations for the government include reviewing the adequacy of APRA’S penalties and giving it the power to appoint someone to undertake reviews. Treasurer Josh Frydenberg said the report found APRA was an “impressive and forceful” regulator for traditional financial risks.