RBA calls for fresh look at changes

The Reserve Bank says a fresh look at the vast array of regulatory changes facing the Australian financial sector would be welcome, as banks grapple with a complex set of new rules.

The Reserve Bank says a fresh look at the vast array of regulatory changes facing the Australian financial sector would be welcome, as banks grapple with a complex set of new rules.

With an Abbott government promising a sweeping review of the sector - a pledge that is supported by several big banks - assistant RBA governor Guy Debelle said a "holistic" view of regulatory changes was needed.

"I think one of the key areas that requires more work is one which is very much in a state of flux at the moment, namely the implementation of the vast regulatory reform agenda," Dr Debelle said on Wednesday night.

"A holistic view of how the Australian and global financial system is being transformed by this would be very welcome and is much needed."

Banks are facing a series of regulatory changes including tougher global capital and liquidity rules, designed to cushion the world from another global financial crisis.

Dr Debelle made the comments as he launched new research on the funding challenge facing Australia over the next decade, and did not refer to the inquiry planned by the opposition.

However, the government's top economic advisers in the federal Treasury told Labor after the 2010 election that a sweeping review of the financial system should be a top priority.

Executives at National Australia Bank and Commonwealth Bank have also backed an inquiry into the financial system - dubbed "Son of Wallis" after the landmark 1990s review of the sector led by businessman Stan Wallis.

In response to the changing landscape, academics from the Australian Centre for Financial Studies, working with the Reserve and Treasury, are examining the changing role of the financial sector as a gateway between savers and borrowers.

The project, which will include examining long-term trends including the rapid growth of the $1.5 trillion superannuation sector and changing fund-raising activity by banks, was launched on Wednesday.

Meanwhile, ANZ group treasurer Rick Moscati said the 15 per cent fall in the Australian dollar had added about $7 billion to its balance sheet, as the lender nears its funding goal for this fiscal year.

Under cross-currency swaps linked to debt issued in foreign markets, counterparties return collateral as the currency falls, giving the bank "an immediate cash inflow", Mr Moscati said.

Australia's banks rely on overseas markets for as much as 70 per cent of their debt funding and the positive impact on their balance sheets from the currency's fall far outweighs any negative effects, Mr Moscati said. With Bloomberg

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