The Murray Inquiry undertook a review of Australia’s financial system between 2013 and 2014.
The Inquiry said that, while it did not recommend ‘major changes to the overall regulatory system’, it believed that action should be taken in five areas to improve the current arrangements ‘and ensure regulatory settings remain fit for purpose in the years ahead’.[1] The five recommendations were to:
- improve the regulator accountability framework;[2]
- improve the effectiveness of our regulators;[3]
- strengthen ASIC;[4]
- rebalance the regulatory focus towards competition;[5] and
- improve the process of implementing new financial regulations.[6]
The Inquiry said that its first recommendation, to improve the regulator accountability framework, was made because ‘Australia needs a better mechanism to allow Government to assess the performance of financial regulators’.[7] To that end, the Inquiry recommended establishing a new Financial Regulator Assessment Board ‘to undertake annual ex post reviews of overall regulator performance against their mandates’.[8]
The recommendation to establish a new assessment board was not taken up by Government.[9] The Government Response to the Murray Inquiry made three points. First, it said that the requirements of the Public Governance, Performance and Accountability Act 2013 (Cth) and the Government’s Regulator Performance Framework provided ‘avenues to strengthen regulator accountability [as did] other existing mechanisms such as Parliamentary hearings’.[10] Second, it said that it proposed to reconstitute the Financial Sector Advisory Council ‘with refreshed Terms of Reference to include providing advice on the performance of the financial regulators’.[11] And third, it said that Government supported providing regulators with clearer guidance in Statements of Expectations and that a proposal had been made to update the regulators’ Statements of Expectations in the first half of 2016.[12]
The Financial Services Advisory Council was reconstituted and, among other things, given the task of providing ‘advice to the Government on the performance of the financial system regulators’.[13] In 2018, the work of the Council was suspended pending the completion of this Commission’s work.[14]
[1]Murray Inquiry, Final Report, November 2014, 235.
[2]Murray Inquiry, Final Report, November 2014, 235.
[3]Murray Inquiry, Final Report, November 2014, 235.
[4]Murray Inquiry, Final Report, November 2014, 236.
[5]Murray Inquiry, Final Report, November 2014, 237.
[6]Murray Inquiry, Final Report, November 2014, 237.
[7]Murray Inquiry, Final Report, November 2014, 235.
[8]Murray Inquiry, Final Report, November 2014, 235.
[9]Australian Government, Improving Australia’s Financial System: Government Response to the Financial System Inquiry, 2015, 23.
[10]Australian Government, Improving Australia’s Financial System: Government Response to the Financial System Inquiry, 2015, 23.
[11]Australian Government, Improving Australia’s Financial System: Government Response to the Financial System Inquiry, 2015, 23.
[12]Australian Government, Improving Australia’s Financial System: Government Response to the Financial System Inquiry, 2015, 23.
[13]Productivity Commission, Report 89, 29 June 2018, 533.
[14]Productivity Commission, Report 89, 29 June 2018, 533.