Regulation
Building societies in Victoria came under the Registrar of Building Societies, a position held by David LaFranchi at that time. LaFranchi had formerly headed the Cooperatives and Societies Division in the corporate affairs department, but his office lacked both legislative powers (in the Building Societies Act of 1986) and enough staff to supervise 250 deposit-taking institutions.
If the registrar discovered a society in difficulty the only real power available was to order a merger with another society. Yet by the time Pyramid was in trouble, the conversion of the RESI Statewide Building Society to become a bank (the Bank of Melbourne) had left the Farrow Group with some 55% of the Victorian market, meaning there was no other society big enough to make a merger useful.
This situation in Victoria was a little unusual. When runs of withdrawals had threatened building societies in the 1970s they got together to form an Australia-wide National Deposit Insurance Corporation to protect depositors, with standby credit and minimum prudential ratios for member societies to observe. The Victorian government of the time had chosen not to participate in that scheme, believing the government could regulate and supervise societies.
Read more about this topic: Pyramid Building Society
Famous quotes containing the word regulation:
“Nothing can be more real, or concern us more, than our own sentiments of pleasure and uneasiness; and if these be favourable to virtue and unfavourable to vice, no more can be requisite to the regulation of our conduct and behavior.”
—David Hume (1711–1776)
“Nothing changes my twenty-six years in the military. I continue to love it and everything it stands for and everything I was able to accomplish in it. To put up a wall against the military because of one regulation would be doing the same thing that the regulation does in terms of negating people.”
—Margarethe Cammermeyer (b. 1942)
“Lots of white people think black people are stupid. They are stupid themselves for thinking so, but regulation will not make them smarter.”
—Stephen Carter (b. 1954)