How the financial markets in Australia are regulated by Reserve Bank and Australian Prudential Regulation?

1. oversight of financial regulators in australia minimal importance recognised. broadly speaking, financial regulation divided between 4 agencies, have discrete responsibilities achieve regulatory objectives outlined below. are:

* reserve bank of australia ("rba"), charged ensuring system stability;

* australian prudential regulation authority ("apra"), develops , enforces prudential standards reduce risk of institutional failure in banking , insurance sectors;

* australian securities , investments commission ("asic"), among other things, promotes disclosure, governance standards , consumer protection in relation financial products; ,

* australian competition , consumer commission ("accc"), promotes competition in financial services sector (as part of wider brief regulate competition).

senior representatives of rba, apra, asic , federal treasury comprise council of financial regulators, charter "facilitate co-operation , collaboration" between rba, apra, asic , treasury "contribute efficiency , effectiveness of regulation , promote stability of australian financial system." council has aim of "harmonising regulatory , reporting requirements, paying close attention need keep regulatory costs minimum." although not body "regulates" regulators, provides forum them work effectively.

of rba, apra, asic , accc independent, largely autonomous statutory authorities. such, not overseen government department or entity charged supervision. both rba , apra managed boards comprising ex-officio , independent non-executive directors or governors appointed treasurer, while asic , accc governed executive commissioners have day-to-day responsibility operations. directors , commissioners have security of tenure, , senior personnel face regular scrutiny parliamentary committees , bound statute act properly. nonetheless, there little direct supervision of regulators' activities.

oversight, wallis inquiry , role of treasury

current structure of financial regulation in australia based on recommendations of federal government's financial system inquiry (known wallis inquiry after chairman), reported in 1997 , implemented through late 1990s. although considered how regulators should overseen in context of advocating significant reform of financial regulatory framework, wallis inquiry recommended against specific measures introduce greater supervision of bodies. instead, recommended regulatory agencies should improve internal , external reporting processes , report annually parliament. having noted financial regulators subject oversight by:

* auditor general, has wide powers conduct periodic audits , investigations;

* parliament, particularly through standing committees , parliamentary inquiries;

* treasurer, consults , has advice of treasury; ,

* independent analysts periodically produce reports or commentary on operation of regulatory agencies,

wallis inquiry concluded "current methods of external review enhanced through additional public reporting financial regulatory agencies… against background, inquiry considers unnecessary establish additional standing body sake of external review of efficiency of financial regulatory agencies." did, however, recommend creation of financial sector advisory council, comprising industry experts, give policy advice treasurer industry perspective in addition advice being provided treasury.

regulatory failure , collapse of hih insurance

1 of far-reaching investigations conduct of regulator in australia undertaken part of royal commission chaired justice owen collapse of hih insurance group. hih 1 of country's largest insurers , failure largest collapse in australian corporate history. justice owen, reported in april 2003, inquired reasons , circumstances surrounding collapse in march 2001. identifying individuals , organisations contributed failure, directed enquire "adequacy , appropriateness of arrangements regulation , prudential supervision of general insurance," particularly in light of reforms following wallis inquiry.

justice owen found

"there no evidence apra contributed to, or have acted

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