Day 474: 'A board long spellbound'
Counting the days since the banking royal commission was established.
Good afternoon, and welcome to day 474.
Today in summary: APRA puts up the ‘We’re hiring’ sign as its remit and budget grow; Super sector consolidation underway, as per APRA’s wishes; and legislation passes to force financial services firms to cooperate with AFCA.
-- Charis
Current banker panic level: 😅😐😧
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APRA is planning to hire as many as 100 new staff to help deliver its new enforcement remit, reports The Australian. Tuesday’s Budget confirmed an additional A$145 million over four years for the regulator, which is expected to soon make public its new enforcement blueprint. APRA chairman Wayne Byers recently said the regulator would be using some of its new funding to implement the outcome of this enforcement review.
Meanwhile, Treasury Secretary Philip Gaetjens has confirmed Treasury will restructure the Markets Group to put in place the Financial Services Reform Implementation Taskforce, the establishment of which was funded in the Budget with A$11.2 million.
Merger suitors First State and VicSuper say lower fees are a goal of the proposed A$113 billion deal, which would see the new entity become the second-largest non-profit fund in the country. The Productivity Commission and APRA are both keen to see further consolidation in the sector, particularly among smaller players. Sunsuper merged with AustSafe Super last year, and Statewide Super is currently considering a merger with WA Super and Tasplan.
Legislation that will force financial services providers to cooperate with disputes body AFCA has passed into law. Financial services licensees must now give “reasonable assistance to AFCA in resolving the complaint” and provide it with any documents required for resolving complaints. The new regime comes into force after ASIC cancelled the financial services licenses of two accounting firms for failing to become AFCA members.
Today’s burn prize: JP Morgan boss Jamie Dimon
🔥🔥🔥
“It is the cumulative effect of many of our policies that has created many of our problems.”
In an irony-laden letter to shareholders the world’s most famous banker said people had lost faith in the government’s ability to solve social problems.
The Commentariat
The belated exit of IOOF chief Chris Kelaher is a perfect illustration of how governance structures in the financial services sector have failed, writes The Australian’s Ben Butler.
“Kelaher should have gone in 2015 after the then-Fairfax Media exposed the company’s toxic culture and aired allegations of insider trading, misstatements of fund performance and cheating.
The share price plunged 20 per cent.
But a board that has long been spellbound by Kelaher’s management magic squibbed it and big shareholders were silent.”