A key Parliamentary Committee will be told today that implementation of the Bank Executive Accountability Regime (BEAR) may alter the way in which the industry views the Australian Prudential Regulation Authority (APRA).
Three senior legal academics for La Trobe and Deakin Universities, Ann Wardrop, David Wishart and Marilyn McMahon will appear before the Senate Economics Legislation Committee in Canberra today and argue that the nature of the BEAR will alter the delicate balance on which APRA’s regulatory approach depends.
“APRA prides itself on employing a regulatory approach which is forward-looking, primarily risk-based, consultative, consistent and consistent with international best practice,” the three academics said in a submission. “It actively supervises by maintaining continuing conversations with institutions as to matters with which it is concerned.
“ASIC on the other hand is a much more traditional regulator, albeit one still adhering to the regulatory compliance pyramid based on the Ayres and Braithwaite model,” the academics said.
“We are concerned that the BEAR rides roughshod over the delicate balance on which APRA’s regulatory approach depends,” they said. “This is not to say we necessarily agree with such an approach as it has the obvious danger of capture and loss of legitimacy.”
“However, we are suggesting that there should be more consideration given as to exactly how the BEAR will impact across the regulatory environment.”
“The core issue in relation to the broader regulatory impact is that in three respects the BEAR misconceives the role which APRA has developed for itself,” the academics said.