Australian Prudential Regulation Authority - History

History

In June 1996, the Financial System Inquiry (known as the Wallis Inquiry) was established to:

• examine the results of the deregulation of the Australian financial system;
• examine the forces driving further change, particularly technological; and
• recommend changes to the regulatory system to ensure an 'efficient, responsive, competitive and flexible financial system to underpin stronger economic performance, consistent with financial stability, prudence, integrity and fairness.

At the time, the regulators of the Australian financial services industry were based on the institutions and not the regulatory function. APRA's predecessor regulators were:

• The Insurance and Superannuation Commission (ISC);
• The Reserve Bank of Australia; and
• The Australian Financial Institutions Commission (AFIC).

The Wallis Inquiry recommended a new structure:

• the Reserve Bank of Australia (RBA) to deal with Monetary policy and systemic stability with the Payments System Board considering payments systems regulation;

• the Australian Prudential Regulation Commission (later to become APRA) to deal with prudential regulation of:
  • Authorised Deposit-Taking Institutions (ADIs)
  • Life and general insurance
  • Superannuation (including Industry superannuation);

• the Corporations and Financial Services Commission (a renamed and expanded Australian Securities & Investments Commission (ASIC) ) to deal with:
  • market integrity
  • consumer protection
  • corporations.

APRA was established on 1 July 1998 under the Australian Prudential Regulation Authority Act 1998.

APRA became prominent in the collapse of HIH Insurance in 2001 and for its investigation into the National Australia Bank foreign currency deal scandal in 2004.

The current chairman of APRA is Dr John Laker and the deputy chairman is Ross Jones.