As crisis eases, APRA's Laker plans exit
Treasurer Wayne Swan said on Wednesday that Dr Laker would end his stint chairman of the Australian Prudential Regulation Authority in June 2014, to be replaced by Wayne Byres.
Under Dr Laker, who has been in the position for almost a decade, APRA has earned a reputation for rigorous supervision of banks' financial health.
At the peak of the global financial crisis, Dr Laker played a key role in the sale of BankWest, then owned by ailing British bank HBOS, to the Commonwealth Bank.
Dr Laker, a former Reserve Bank official, was also closely involved in developing policies such as the government guarantee of deposits.
"Dr Laker has overseen the strength of Australia's financial institutions through one of the most turbulent periods for the global financial system in 80 years," Mr Swan said. "His tough supervision has helped to ensure our financial system remains one of the strongest in the world."
Key to Dr Laker's tenure has been overseeing the introduction of Basel 3 rules in the Australian banking system. He rebuffed calls by the major Australian banks, which argued they should be exempt from parts of the tough new rules given they escaped the worst of the financial crisis.
Even as the financial crisis appeared to be receding, at least locally in late 2009, Dr Laker famously issued a blunt warning to the sector: "Memento mori." The Latin term for "remember that you will die" was aimed at reminding banks of their own mortality.
The chief executive of the Australian Bankers Association, Steven Munchenberg, said banks had a strong working relationship with Dr Laker, despite often disagreeing with him.
He cited the latest wave of global banking regulations - with APRA imposing tough rules on Australian banks while also lobbying for the banks to be given special consideration where needed - as an example of this pragmatism.
"He does not easily change his views on things, which he would probably see as a good thing for a prudential regulator," he said.
Mr Byres has worked at APRA since it was formed in 1998.
Frequently Asked Questions about this Article…
John Laker is Australia's top financial regulator and the chairman of the Australian Prudential Regulation Authority (APRA). He led APRA for almost a decade, earning a reputation for tough supervision that helped keep Australian banks financially strong — a key consideration for everyday investors who hold bank stocks or rely on the stability of the financial system.
According to the article, John Laker will step down in June 2014. Treasurer Wayne Swan announced that Wayne Byres will replace him as APRA chairman.
During the global financial crisis Laker played a key role in the sale of BankWest (then owned by HBOS) to the Commonwealth Bank and was closely involved in developing the government deposit guarantee. These actions helped stabilise the Australian banking sector, which matters for investors tracking bank shares and financial-system risk.
Under Laker, APRA applied rigorous supervision of banks' financial health and introduced tougher regulatory standards. Treasurer Wayne Swan credited Laker's supervision with helping ensure Australia's financial system remained one of the strongest in the world — important context for investors assessing bank safety and credit risk.
Laker oversaw the introduction of Basel 3 rules in the Australian banking system. He resisted calls from major Australian banks to be exempt from parts of the tougher new rules, ensuring fuller adoption of the international Basel 3 standards domestically.
In late 2009 Laker warned the banking sector with the Latin phrase 'Memento mori' — 'remember that you will die' — a blunt reminder to banks of their own vulnerability. For investors, it highlighted APRA's stance that banks should not become complacent about risk even as the crisis receded.
Wayne Byres, the announced successor to John Laker, has worked at APRA since it was formed in 1998. His long tenure at the prudential regulator suggests continuity in APRA's approach, which everyday investors may view as a steadying factor for regulatory policy.
The Australian Bankers Association, through CEO Steven Munchenberg, said banks had a strong working relationship with Laker despite frequent disagreements. The ABA noted APRA balanced tough rules with pragmatic lobbying for banks when needed — indicating regulators and banks engaged constructively, a dynamic relevant to investors monitoring regulatory risk and industry relations.
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