Mr Frydenberg has said that regulators now have the tools to deliver on their mandate and shouldn’t ask the government for more lest they disrupt the recovery, warning that regulation had become “overly prescriptive”.
“Regulators do not carry out their mandates in a vacuum. They must pursue their mandates in a manner that is consistent with the will of the Parliament,” Mr Frydenberg told media.
Mr Frydenberg said the creation of the Financial Regulator Accountability Authority – which was recommended by commissioner Kenneth Hayne – would “hold (regulators) to account” and that they needed to remember who they worked for.
“It is the Parliament that decides who and what should be regulated. It’s the role of the regulators to deliver on that intent – not to supplement, circumvent, or frustrate it,” Mr Frydenberg said.
“In the context of the COVID recovery, it’s critical that our regulators are conscious of the environment they are operating in and that they have the flexibility to respond in a way that simultaneously fulfils their mandate, enhances consumer outcomes, and supports, rather than hinders, the recovery.”
Mr Frydenberg recently announced the government’s intent to repeal responsible lending laws following ASIC’s disastrous “wagyu and shiraz” case, but said that the move wasn’t intended to give banks more breathing room.
“We want to cut red tape, but this is not about trying to help the banks. The banks are not my constituency. This is about helping consumers,” Mr Frydenberg said.
“I am seeking, from regulators, that they are not making policy or overreaching. I want to see them enforce the law – that would be better time spent than sending psychologists into the board room, frankly.”
