The Association of Superannuation Funds of Australia (ASFA) was studying ways to begin talks on the growing relationship between tougher banking capital requirements and superannuation, the chief executive of the peak super industry body said yesterday.
“The links between banking and superannuation are growing stronger,” ASFA chief executive Pauline Vamos told InvestorDaily.
“This means a conversation has to take place and we are looking at ways we can have that conversation.”
Vamos said the main catalyst was Basel III, the strict banking standard set up after the global financial crisis (GFC).
Basel III aims to ensure global banks have more than enough capital on hand in case of financial market turmoil and other potential stresses on the system after the GFC brought down institutions previously believed to be too big to fail.
Vamos said banks’ funding needs, including their reliance on offshore funding to expand the pool of money available to lend at home, was another factor.
She said ASFA was keen to discuss the growing relationship with the Australian Prudential Regulation Authority (APRA).
“In my view, it’s also important to have that discussion with the banking industry. Within our own membership, we have members who are banks, and we are seeking to have those conversations with them,” she said, referring to Australia’s four major banks.
APRA recently led the charge for the restructuring of ME Bank, owned by 32 industry super funds, over GFC-related concerns of its holding company ownership.
The prudential regulator’s push for better protection of assets led to ME Bank and wholly-owned ME Portfolio Management being split from Industry Super Holdings, which owns a funds management company and financial advice group that advises industry super funds and union members.
Asked about the APRA-led restructuring of industry fund-run ME Bank, Vamos declined comment, saying only: “It’s important that APRA is left to do its job.”
