Australia’s international reputation has been damaged by poor implementation of Financial Services Reform (FSR), with many other countries now actively looking to avoid making similar mistakes, according to one of FSR’s leading architects.
Former Australian Securities and Investments Commission (ASIC) director of FSR licensing Pauline Vamos, who is now consulting to several overseas Governments on licensing, said the perception of FSR abroad has shifted from being viewed as global best practice to something to be avoided.
She said many countries, particularly in the Asia Pacific region, are in the process of or are considering implementing financial sector reforms. However, after initially looking to mirror FSR in Australia, they now have reservations.
“I’m being shocked by the ferocity of what some of our neighbours are saying, with some saying ‘we don’t want anything like Australia’,” Vamos told Money Management.
According to Vamos, the perception is being fuelled by the fact FSR has not worked as smoothly as anticipated. This is having a damaging effect she said, particularly at a time when, as an industry, Australia is looking to expand and become a more global player.
“A lot of our neighbours are looking at FSR, and they’re looking because the regulation of financial services firms and intermediaries is on the agenda of many Asian countries.
“Thailand, Papau New Guinea, the Philippines, Singapore, China and everybody is looking at it, so it’s a huge opportunity for Australia. However, the wrong message is coming across,” Vamos said.
When FSR came into force, Vamos said it was recognised as leading broad-based reform. However, the view now is that FSR is not working and it’s not helping the consumer.
“The sad thing for me is that because of some of the stories that are coming out of Australia, FSR is being viewed negatively overseas, and while the concept of FSR has huge worldwide attraction, the industry [internationally] is starting to say, ‘all we see is the negative side’,” Vamos said.
