APRA’s chairman has told journalist that he views the independent capability review as an endorsement of its strategic plan written earlier this year.
The independent review handed down its report on the authority earlier last week and among other things called on APRA to fix its culture.
However, Wayne Byres, chairman of APRA, told journalists on a conference call that he viewed the review as an endorsing and fair report.
“The capability review is a helpful endorsement that we've identified the right priorities and we're on the right track," said Mr Byres.
“The report therefore doesn't call for a change of direction in our operations, it's more evolutionary, building on several programs of work already underway.”
Mr Byres confirmed that APRA broadly supported all 24 recommendations and had already begun work on the 19 directed towards APRA.
“The key challenge posed by the report, as has been the case for reviews by the IMF and the Productivity Commission, the royal commission and now the capability review, is that they all identify a whole range of areas where APRA needs to do more if it’s to be effective and successful in the future, but without providing any suggestion on where it might do less,” he said.
One of the recommendations of the review panel was for APRA to undertake more CBA-style governance reviews but Mr Byres said that was a valuable but expensive report.
“The challenge is that it’s an extremely costly and resource-intensive exercise, so it does come to a question of how we allocate the resources to do that, how we select the candidates and how we decide how that sort of thing is going to be funded, but very happy to work the concept into our plan going forward,” he said.
CBA paid the costs of having the inquiry done, something Mr Byres himself admitted, so the question about why APRA does not utilise reviews more still remains.
“We asked CBA to bear the cost of that report. I mean most of the cost of that report, there was some internal costs to APRA which we had to bear, but the vast bulk of that cost was paid for by CBA,” he said.
Recently APRA had requested 36 organisations to undertake self-assessments of which two major banks, Westpac and NAB had released the results to the public.
Mr Byres said that APRA made a decision at the time to not publish the assessments they received and it would not be in good faith to change that.
“We thought it was important if we were going to get very frank assessments that we would give our commitment ourselves that they would be reports to APRA,” he said.
Interestingly ANZ said that it was up to APRA to release the report and that they said it was up to the regulator.
“ANZ has no issue with the self-assessment becoming public, but it is up to APRA to release it,” said an ANZ spokesperson.
The review also brought to light the capability of APRA’s leadership which was echoed by senator Rex Patrick who called for the resignation of Mr Byres.
“The chair of APRA has been assigned clear responsibility, has authority vested in him by law and must therefore he held accountable for the performance of the organisation. When you earn $886,000 you have to be the best in the game, full stop,” Mr Patrick said.
Mr Byres said that every organisation had leadership variability and that in recent times under him APRA had changed its framework, its promotion, performance and assessment processes.
“We put a lot of effort into sharpening up consistency, making sure there was good collaboration. That may have played out in terms of slower responses, it may have played out in terms of what's seen as encouraging conformity. So getting that balance right is quite difficult,” he said.
Eliot Hastie is a journalist at Momentum Media, writing primarily for its wealth and financial services platforms.
Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.
Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).
You can email him on: [email protected]