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APRA could get powers to fire bankers without court process
The Australian 12:00am July 14, 2017
Michael Roddan
MESSAGE TO MINISTER IN A MUDDLE O'DWYER: This issue is NOT about "Bad Bank Behaviour –
The Big Issue is clearly about Criminal Asset-Stripping by Banks, and using a stolen war chest against
Consumers. STOP pussy-footing around this issue. You are the Minister, start by calling in the AFP
and then ask Brandis to brief CDPP. Bankers urgently need BIG Jail Time.
The federal government has proposed giving the prudential regulator the power to fire banking executives without going through the Federal Court as part of new rules to hold bankers to account.
In a Treasury consultation paper for the new Banking Executive Accountability Regime, released yesterday, the government floated plans to give the Australian Prudential Regulation Authority the power to establish “new expectations” for banking executives and their remuneration.
The measures were announced in the budget in May, following recommendations from the government’s parliamentary inquiry into the four major banks. Liberal MP David Coleman, who chaired the inquiry, recommended accountability rules like those that govern banking conduct in Britain.
The lenders have been given three weeks to respond to the consultation paper, which proposes that banks must register prospective executives and directors with APRA, and provide the regulator with “maps of their roles and responsibilities”. Executives in bank subsidiaries that operate in non-banking sectors and foreign subsidiaries of the banks will also fall under the new rules.
The regime will give APRA stronger powers to remove directors and executives from the institutions it regulates, subject to review. Currently, the regulator must go through the Federal Court and appeals processes.
The paper has said expectations of lenders and their directors and executives will be specified and where these expectations are not met “there will be civil penalties” and APRA will have power to impose penalties on banks not “appropriately monitoring” the suitability of executives.
The list of “accountable” bankers will cover the chairs of board committees and managers responsible for areas with a “significant” share of revenue, profits or assets. It will apply to bankers with “significant influence over conduct and behaviour” of workers.
Acting Treasurer Kelly O’Dwyer said it was “imperative Australians have trust and confidence” in the banking system. “Banks must operate at the highest standards and meet the needs and expectations of consumers and businesses,” Ms O’Dwyer said. “But recurring scandals have shown that this is not always the case.
“It is important that there are mechanisms in place to deter poor behaviour and ensure that banks are held to account where they fail to meet the standards expected of them.”
Under the new powers, variable remuneration for senior executives will be deferred for at least four years and APRA will have stronger powers to require banks to review and adjust remuneration policies. Feedback has been requested on whether shifting from variable to base remuneration would be problematic and affect risk-taking.
“The BEAR should make it easier to hold senior individuals to account for their behaviour in carrying out their responsibilities,” the paper said.
Treasury is consulting with APRA to ensure the new regime does not conflict with the regulator’s existing powers.