Just because the GFC happened doesn't mean it was caused by a lack of regulation, said a senior APRA executive in a major speech this week.

"Just because one event follows another does not mean that the first event caused the second event," explained David Lewis, APRA general manager at the UBS Australian Financial Services Conference yesterday.

"Understandably, when there has been a breakdown in financial markets of the magnitude of the one we are currently dealing with, there will be calls for more financial sector regulation," said Lewis.

"We should make sure that the changes we make are well thought through and not based purely on circumstantial evidence," he said.

Lewis said Australia has been shielded from the worst of the crisis because of "maintenance of sound fiscal and monetary policy settings by successive Governments ... a financial market that is dominated by large and, generally, soundly-run financial institutions not prone to excessive risk-taking; and active and conservative prudential supervision."

Lewis said that while regulation and active supervision is crucial, so too is "the adoption of sound risk management practices and good corporate governance within financial institutions."

"Unfortunately, the quality of the implementation of prudential policies is often overlooked (or simply taken for granted)," he said.

Lewis said continuing to focus on 'nuts and bolts' practical issues is a key to how successful Australian financial regulation has been and how it should work in the future.

"We realise that APRA's conservatism can - at times - be an irritant to business aspirations. And that some of the decisions we take can be 'line-ball'. But, ultimately, erring on the side of caution serves not only to protect beneficiaries, but also to provide an important source of confidence in our financial institutions."