Byers warns not to spread APRA too thin

With every review adding more to its plate, APRA chair Wayne Byers has warned against spreading the regulator too thin.

Appearing before the House of Representatives Standing Committee on Economics on Friday, APRA deputy chair John Lonsdale reiterated the prudential regulator's view that it requires more funding to ensure it remains an effective regulator.

"APRA has been clear from the outset that we support all of the panel's recommendations," Lonsdale said.

"Everyone at APRA takes the review's findings seriously, and we recognise the need to improve and adapt to remain an effective regulator in an increasingly complex financial environment.

"We have also made clear - as noted by the report - that for a number of them to be fully implemented, increases in funding, and changes to legislation or policy will be required."

When pressed on the issue, APRA chair Wayne Byers - appearing by phone from Sydney alongside deputy chair Helen Rowell, member Geoff Summerhayes and general counsel Warren Scott - said several recent reviews had asked more from the regulator, stretching its resources.

"So I think in answer to the deputy chair's question and reconciling the statements, the way I would put it is, we have been tasked by the capability review to think about our mandate much more broadly than we had traditionally done," Byers said.

"The capability review and indeed the other reviews that John mentioned in the opening statement gave us a range of recommendations that we should do more of or do more intensively, or do more frequently. Unfortunately no one has come up with suggestions we could do less of.

"So increasingly we're being asked to step into new areas of activity or step up the intensity of what we do, and we're happy to take that challenge on. But inevitably it raises some resource questions."

Byers noted some functions within the regulator had been funded directly by the government, including additional funding in the budget for governance, culture, remuneration and accountability, ensuring the regulator's work in those areas was not constrained.

However Byers warned that with more issues appearing on the regulator's plate, it risked falling short without more resources.

"The capability review also said we should devote more resources to technology risks, we should devote more resources to superannuation supervision, we should devote more devote more resources to resolution and planning for crises: a range of areas where we should devote more resources," Byers notes.

"Unfortunately there's a limit to how thin we can spread our resources given the capability review also said quite strongly that we shouldn't jeopardise the core tasks that we've traditionally done well around financial safety and resilience."

Read more: APRACapability reviewWayne ByersGeoff SummerhayesHelen RowellJohn Lonsdale
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