Regulator claims value for money
John Laker
The Australian Prudential Regulation Authority has acknowledged that the cost of regulation has increased substantially over the past five years but argued that the financial services industry is still getting good value for money.
In a recent address to the Accounting Foundation in Sydney, the chairman of APRA, John Laker, said that APRA’s direct costs were readily observable and had risen significantly over the past five years, a period in which the regulator had been building up its supervisory numbers and capabilities.
“This growth phase is now largely complete,” he said.
“However, relative to the value of assets supervised by APRA, costs have fallen steadily. At below 4 cents per $1,000 of assets supervised, we could hardly be described as a high cost regulator.”
Laker said that where they could be produced, measures of compliance costs needed to be interpreted carefully.
“It is important to separate out ‘real’ compliance costs from those costs which an institution would normally incur in its day-to-day operations as part of doing good business,” he said.
“The incremental resource costs of prudential regulation are the costs of activities that a well-managed and prudent financial institution would not choose to undertake in the absence of regulation.”
AUTHOR
Mike Taylor
Recommended for you
Insignia Financial has announced the status of the two private equity bidders as due diligence comes to an end, with one bidder opting to pull out.
The corporate regulator has cancelled the AFSL of a Queensland-based financial services provider, having held the licence since mid-2016.
The financial advice industry has reacted to the appointment of Dr Daniel Mulino as the new Minister for Financial Services, with hopes for improvements in legislation and education standards.
With less than one-third of Australian business owners seeing an adviser, Business Health has detailed how advice practices can successfully target this underserved client segment.
