“..Mr Byres said APRA was not responsible for policing much of the conduct at the centre of the royal commission.
“Those laws are administered by ASIC. Instances of fraud will be pursued by the corporate regulator and the police in some cases,” he said.
“That’s not to say we don’t have an interest in these issues, because we do — the prudential interest in these issues is trying to understand the extent to which these issues indicate a failing in the governance oversight and accountability within organisations.” …”
with the assessment of the Banking Royal Commission to date by UBS.
“..So far the Royal Commission has been presented with substantial evidence based on a number of case studies into banking misconduct. The following are a series of quotes from the Royal Commission transcript which illustrate the extent of these issues:..”
Regulating private bank credit creation is not APRA’s job.
The comments of Wayne Byres are not surprising as they are consistent with the design and philosophy of APRA.
APRA is NOT a regulator of private bank credit creation it is a regulator of private bank “prudential” performance.
They are NOT the same thing as Byres points out.
The fact is NO ONE is directly regulating private bank credit creation. ASIC may have some responsibilities (albeit not much enthusiasm to date) for outright financial system crooks but it has no brief with regard to private banks driving asset bubbles by creating credit and handing it by the truckload to local and foreign speculators.
That was the whole point of the “deregulation” era with regard to private banks. They are, according to modern free market theory, when competing with each in the free market, the most efficient allocators of private bank credit.
Sure we now know the theories have proved to be wrong… and we have ended up living in a continent sized country with a small population and an economy stuffed with household debt driven bloated residential asset prices but until the mission of APRA (and the RBA) changes why does anyone keep expecting its officers to talk as though it has?
APRA was dragged kicking and screaming to credit creation regulation-lite aka macroprudential – and they are clearly keen to ditch it as fast as possible. The ideological extremists at the RBA still have next to no time for any talk of macroprudential let alone credit creation regulation.
Both organisations are designed from the ground up on the assumption that regulating the purposes for which private banks create credit is unnecessary.
Learning from the campaign to stop the Big Business Big Australia population ponzi
People now understand that a relentless campaign to fix immigration policy is required yet still seem to think some hairy magical pixie is going to fix the regulatory and structural problems that have turned our banking and monetary systems into a massive asset price casino ridden with sharp practices and crooks in shiny suits.
It will not fix itself. It requires changes in policy, law and regulation and most importantly of all and understanding that the changes are unavoidable.
The only thing that has papered over the disaster on the horizon is the determination of policymakers to keep spraying more unproductive private bank credit creation at the problem.
1. Massive inflows of foreign capital to drive down mortgage rates.
2. Massive inflows of new immigrants as consumers of credit products and to drive up demand for housing.
3. Massive sales of local residential assets to foreigners.
4. Taxation policy that rewards debt driven asset price speculation.
5. An effective taxpayer guarantee underwriting the scam.
An ongoing flood of unproductive private bank credit may postpone the day of reckoning but it is just making the problems worse and causing more severe and lasting damage to the Australian economy and the future of our children.
Until people start treating the RBA and APRA as a public policy failure like the Big Business BIG Australia population stuffing program nothing will change and we remain enroute to an eventual economic ‘iceberg’.