Implementation of the Banking Executive Accountability regime is likely to be riddled with complexity especially in terms of accommodating pre-existing arrangements, according to the Australian Prudential Regulation Authority (APRA).
Under questioning during Senate estimates, APRA chairman, Wayne Byres confirmed the challenges confronting the regulator in seeking to implement the new regime announced by the Treasurer, Scott Morrison in the Budget.
Byres said he did not believe the process was likely to be straightforward. “Like all of these things, the devil is in the detail. You are dealing with individuals’ employment arrangements and there will be all sorts of complexities associated with things that are already in train that people have entitlements to,” he said.
“There will be a fair bit of complexity in working out how you handle things that are already in place.”
The APRA chairman also pointed to the fact that banks would have to pre-notify the regulator about impending appointment, describing it as a form of registration.
“The second leg is a requirement for institutions that are subject to the regime to map accountabilities to individuals, so it becomes clearer who is responsible for what,” he said.
The third leg is then a set of expectations around how individuals and institutions are expected to conduct their business, and then the fourth component is what you do if people fail to deliver on that, either individually or as an organisation.”
However he made clear that APRA would not be “unilaterally applying penalties” and that matters would be referred to the courts.
