The chairman of the Australian Prudential Regulation Authority (APRA), Wayne Byres, thinks the Royal Commission’s final report placed responsibility for misconduct on the financial institutions and those who managed and controlled them.
In an address to international delegates attending a Financial Stability Institute executive meeting in Sydney, Byers defied many industry perceptions by asserting it was managers and senior executives of the financial institutions who were being held responsible.
“The Commission’s Final Report, which was released a little over a week ago, firmly placed primary responsibility for misconduct on the financial institutions concerned and those who managed and controlled them: their boards and senior management,” Byers said.
This stands in contrast to the views of some planning organisations, including the Association of Financial Advisers (AFA) which has argued that the Royal Commission may have been aiming at the banks and financial institutions but ended up hitting advisers.
Byers said that just as there had been a need to improve the regulation and supervision of financial risks following the events of 2008 [the global financial crisis], the Commission had also exhorted regulators in Australia to be more forceful, particularly in relation to standards of governance and culture within the financial sector.
“We will certainly do so,” he said. “But to generate lasting change, sound principles and policy reforms must ultimately be accepted and genuinely embraced by those who operate financial businesses as the way business must be done, and not just an impediment to getting on with business.”