Each body with an oversight role in respect of APRA or ASIC serves an important, but limited, function. The current framework is heavily focused on governance and financial accountability.[1] None of the existing processes requires regular and systematic review of how well either regulator discharges its statutory functions or exercises its statutory powers.
The Murray Inquiry recommended that a Financial Regulator Assessment Board be established ‘to undertake annual ex post reviews of overall regulator performance against their mandates’.[2]
Given the importance and size of ASIC’s remit, I have come to the view that a permanent oversight body is now required. Similarly, the significance of APRA’s work to the strength of Australia’s financial system and the interconnectedness of its work with that of ASIC – which will be significantly amplified if the recommendations I have made are implemented – mean that it too should be subject to more consistent and rigorous assessment.
[1] See Treasury, Interim Report Submission, 41 [200].
[2] Murray Inquiry, Final Report, 235. See also John Uhrig, Report of the Corporate Governance of Statutory Authorities and Office Holders, June 2003, 52–5.