The association for customer-owned banks has said that the MOU between APRA and ACCC recognises the need for competition in banking, adding that smaller banks are more impacted by regulation.
The Customer Owned Banking Association (COBA) has welcomed the announcement by the Australian Prudential Regulation Authority (APRA) and the Australian Competition and Consumer Commission (ACCC) that they have signed an updated memorandum of understanding (MOU) designed to allow closer collaboration between the two regulators.
In response to the announcement of the MOU, COBA CEO Michael Lawrence said it is a positive sign that the two regulators have committed to build their relationship, especially in the current environment when competition is vital for economic recovery.
“Smaller banking institutions are disproportionately impacted by regulation, with the relatively higher cost of compliance diverting resources away from customers,” Mr Lawrence said
“A competitive banking market is key to delivering the best outcomes for customers as we work through the largest economic downturn in living memory.
“Government and regulators must take a balanced approach to new regulation in this economic environment, ensuring competition remains strong.
The two regulatory bodies have been collaborating more closely during the coronavirus pandemic, particularly in relation to resolution planning and authorisations on anti-competitive arrangements in the financial system.
Under the MOU, both regulators have agreed to a broader model of engagement, with a greater emphasis on proactive information sharing and collaboration.
Among other things under the arrangement, the ACCC and APRA have agreed to share information “relevant to competition in the financial system, or the financial or prudential soundness of regulated financial institutions”, with each other.
However, this may be subject to any statutory secrecy and nondisclosure obligations, other confidentiality and information-sharing obligations, or other constraints.
Commenting on the MOU, APRA chair Wayne Byres said: “APRA and the ACCC have a strong working relationship, founded on a common focus in supporting a safe, competitive and efficient financial system.”
“Although APRA’s mandate requires our primary focus to be financial soundness and stability, we are also required to balance this with a range of other considerations, including competition. Updating this MOU reflects the importance of our relationship with the ACCC and acknowledges the importance of competition in maintaining a healthy and efficient financial system.”
ACCC chair Rod Sims said: “This MOU will allow the ACCC and APRA to continue to share intelligence and insights and work closely together to achieve good outcomes for Australians, including ensuring the impacts of COVID-19 on the financial sector are managed in a pragmatic and sensible way.”
[Related: Heritage calls for education on mutual banks]
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.
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