The annual Policy Priorities report of the Australian Prudential Regulation Authority (APRA) outlines its areas of intended focus over the next 12 to 18 months.
Chair of APRA, Wayne Byres said the agenda would be shaped by the Authority’s response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
“It also takes into account major developments including other inquiries, new legislation such as the Banking Executive Accountability Regime, and important industry trends,” Mr Byres (pictured) said.
“Much of APRA’s focus in 2019 will be on strengthening the prudential framework to lift the bar for industry in terms of governance, remuneration practices, and the management of non-financial risks.”
He said financial soundness and stability remained at the core of APRA’s objectives.
“APRA’s Prudential Inquiry into Commonwealth Bank of Australia (CBA) highlighted the importance of not just having a healthy balance sheet, but also strong governance, a sound culture, appropriate internal controls, and clear accountabilities,” Mr Byres said.
“These issues were further emphasised during the Royal Commission, where a lack of accountability often lay at the heart of misconduct and poor consumer outcomes.”
He said that in order to address these issues, APRA would further strengthen its prudential requirements on executive remuneration, with consultation on a revised prudential standard due to start mid-year.
“We will also review our cross-industry governance and risk management standards this year to ensure they encourage a sharper focus on non-financial risks,” Mr Byres said.
APRA’s 24-page Information Paper on its priorities can be accessed at this PS News link.
