With Parliament’s passing of the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Bill 2017, APRA’s crisis management powers have been strengthened and, in the words of Chairman Wayne Byres, “better equipp[ed]” them to deal with a financial crisis and to accordingly protect the financial well-being of Australians.
At the heart of these powers is the ability to protect bank depositors and insurance policyholders.
Appearing before the Senate Economics Legislation Committee on 1 March, Mr Byres also shared APRA’s prediction that the housing boom had, indeed, subsided. The comments were made amid signs that banks are preparing to increase lending to housing investors again by winding back interest costs, saying the need to maintain a 10 per cent annual growth limit on investor lending was reducing.
With an enhanced ambit of power, APRA has already provided information to the Royal Commission into Misconduct in Banking, Superannuation and Financial Services Industry. Mr Byres also shared that APRA will be subject to extensive international scrutiny from the International Monetary Fund (IMF) as part of its 2018 Financial Sector Assessment Program (FSAP). Expecting the FSAP to find areas for improvement, APRA committed its full cooperation to the process, acknowledging that with great power comes great responsibility.
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