Former Australian Competition and Consumer Commission head Graeme Samuel will be joined by erstwhile Westpac executive Diane Smith-Gander and Grant Spencer, a former deputy governor of New Zealand’s Reserve Bank, in conducting a capability review of the Australian Prudential Regulation Authority.
The review, of course, was recommended by the royal commission into the finance sector, which found APRA and the Australian Securities and Investments Commission were altogether too passive and collegial as regulators.
“As part of our response, the Government agreed to conduct regular capability reviews going forward and to a capability review of APRA commencing in 2019,” said Treasurer Josh Frydenberg.
“The expert panel has thorough understanding of the Australian financial system and APRA’s role as Australia’s prudential supervisor and possesses strong senior leadership experience across public and private sector organisations.”
Smith-Gander has previously been group executive at Westpac and a partner at McKinsey & Company, among many other boardroom positions, and is currently an adjunct professor in corporate governance at the University of Western Australia. She was also chair of Broadspectrum, which became a target for critics of offshore immigration detention centres due to its former role as a major contracted service provider, and is familiar to many public servants under its former name, Transfield.
Spencer was the NZ central bank’s head of financial stability, and acting governor during 2017 and 2018. He has also held senior roles at the International Monetary Fund and ANZ.
Frydenberg said the panel would look at “APRA’s capability to promote financial stability within its frameworks as well as its readiness to respond to issues raised by the Royal Commission and the Productivity Commission”.
“This includes APRA’s capability to regulate superannuation entities for the benefit of members, the role of enforcement activities and coercive powers and the supervision of culture, governance and remuneration in regulated institutions.
“The APRA capability review will provide a forward-looking assessment of APRA’s ability to respond to an environment of growing complexity and emerging risks for APRA’s regulated sectors.
“The capability review will build on the recently completed International Monetary Fund’s Financial Sector Assessment Program which included an assessment of APRA’s policy and supervisory framework for banks and insurers.”
The panel starts work in March and is due to report to government by June 30 this year.
Samuel (pictured) has never been one to mince words, leading Australian Financial Review columnist Jennifer Hewett to warn that APRA faced an uncomfortable probe when he was announced as the main reviewer last week.
At the time, he was in the middle of going to town on the Productivity Commission’s draft report on airports, in his role as head of the lobby group Airlines for Australia and New Zealand. The former ACCC chair told the ABC it was “superficial … nonsense” based on “very, very poor analysis” and therefore “not worth paper it was written on” in his view.
He also demonstrated this willingness to bluntly state his views in an interview with The Mandarin on the problems with the online Census in 2016 and the wider boycott campaign that preceded it.