Frydenberg tells regulators to go hard in wake of royal commission

Mr Frydenberg told ASIC chair James Shipton that he expected the authority to follow the commission’s recommendation while «re-considering» the use of infringement notices or enforceable undertakings.

«It is imperative that ASIC counter perceptions that compliance with the law is voluntary,» he wrote.

«The community expects that your actions will send a clear message to firms that they must obey and comply with all the laws, not just those they find to be commercially acceptable.»

Treasurer Josh Frydenberg has signalled extra funding for ASIC and APRA so they can respond to the banking royal commission.

Treasurer Josh Frydenberg has signalled extra funding for ASIC and APRA so they can respond to the banking royal commission.Credit:AAP

ASIC will be asked to monitor and report until the end of 2020 whether firms end the grandfathering of conflicted remuneration across the financial sector. That will also include whether the financial benefits are passed on to consumers.

Mr Frydenberg also tells both ASIC and APRA that the government will set up a follow-up independent inquiry in three years’ time to assess the response of the entire sector to the royal commission.

This will include changes in industry practice and consumer outcomes.

The treasurer has signalled to APRA that the government will look to change its oversight of the superannuation sector, saying it may look at «strengthening its regulatory and enforcement approach».

He also told APRA chair Wayne Byres that he wanted prompt action by the authority to improve its supervision of financial sector remuneration and to revise standards relating to misconduct, compliance and non-financial risks.

Both regulators are expected to need extra funding and staff to follow through with the royal commision’s findings. Mr Frydenberg said he would «give further consideration» to their financial needs in the budget.

Speaking in Sydney on Wednesday, Mr Byres told a conference on banking supervision there was a clear case for a «much stronger» focus by the authority on the governance, culture and remuneration practices of financial institutions.

APRA chairman Wayne Byres says his agency will need extra funding to intensify its monitoring of the financial sector.

APRA chairman Wayne Byres says his agency will need extra funding to intensify its monitoring of the financial sector.Credit:Dominic Lorrimer

He said that focus would likely need more resources for regulators.

«Regulation can help with some of the design features of a good framework, but ultimately insightful and astute supervisory judgment is essential,» he said.

«An increased intensity will require additional resources, new skills and, in some cases, a different approach. Yet if we genuinely want to make sure policymaking efforts over the past decade change, actual behaviours in the financial system, these issues need much more attention.»

Justice Hayne targeted much of his criticism at the banks and financial companies. In the past week the chairman of the NAB, Ken Henry, has announced his plans to step down while the bank’s chief executive Andrew Thorburn has left the institution.

In his letter to ABA chief executive Anna Bligh, Mr Frydenberg said the association’s members had to accept Justice Hayne’s findings.

He said banks had to commit to «putting customers at the heart of their business» so as to restore trust in the sector.

«I ask that you work with your members to take action and truly commit to restoring trust in the financial system,» he wrote.

«Only strong and decisive action of the kind that leads to lasting change, will ensure that the misconduct revealed by the royal commission is not repeated and that the public’s trust is regained.»

Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.

Most Viewed in Politics

Loading

Источник: Theage.com.au

Источник: Corruptioner.life

Share

You may also like...