APRA maintains vigilance amid sovereign debt issues
The Australian Prudential Regulation Authority (APRA) has signalled that it is not ready to drop its guard with respect to financial services regulatory reform and has cited the sovereign debt issues confronting Greece and other European economies as justification for its continuing vigilance.
In an address to financial services accountants on Friday, APRA’s general manager of policy development, Helen Rowell, said that while some of the urgency for regulatory reform had appeared to dissipate amid the more benign economic environment, this was not the time to relax.
“Up until the last few days, a number of market commentators were suggesting that the global financial crisis was behind us. But is this the case?” she asked.
Rowell said that while it was true that the global economy had begun to rebound, the positive signs were by no means universal.
“Uncertainties continue to cloud the global economic forecast. Recovery in most advanced economies, as the [International Monetary Fund] has noted in its most recent World Economic Outlook, is expected to be relatively sluggish compared with recoveries from previous recessions,” Rowell said. “Furthermore, the unwinding of substantial public interventions is presenting serious challenges for some governments and regulators.
“The pressure on the sovereign debt of some European issuers, and its flow on effects to financial markets over the last few days, is another reminder that the global economy and global financial markets remain vulnerable to aftershocks,” she said.
AUTHOR
Mike Taylor
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