has bemoaned the erosion of its independence as constraints on its flexibility have grown, stating that it has “fallen short of global standards”.
The prudential regulator made these comments in its submission to the Financial System inquiry.
It wrote: “APRA
has substantial independence from Government
in most respects but, over time, constraints on its prudential, operational and financial flexibility have eroded its independence. As a consequence, Australia falls short of global standards in this area.”
It highlighted the work it has done to keep the prudential framework up to date with industry developments, and said further substantial reforms are not needed.
It went on to say that a prudential framework consistent with international standards is “critical to ensuring the attractiveness of regulated institutions to providers of funding and capital” and results in greater appetite for the debt and equity instruments of these institutions, lower costs in raising funding and capital in global markets, and business opportunities that rely on an institution’s creditworthiness being readily transparent.
“In summary, this Inquiry has a very positive backdrop for its deliberations,” it concluded.
To read the full submission, click here