RBA seeks 'holistic' review of rule shake-up

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

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

With the Coalition promising a sweeping review of the sector if it is made government - a pledge supported by several big banks - assistant 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 a study of 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 advisers in the federal Treasury told Labor after the 2010 election a sweeping review of the financial system should be a top priority.

National Australia Bank and Commonwealth Bank executives 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.

Australian Centre for Financial Studies academics, working with the Reserve Bank and Treasury, are examining the changing role of the financial sector as a broker between savers and borrowers.

The project will also long-term trends, including the rapid growth the $1.5 trillion superannuation sector and changing fund-raising activity by banks.

Meanwhile, ANZ treasurer Rick Moscati said the 15 per cent fall in the Australian dollar had added about $7 billion to the group's balance sheet, as the lender nears its funding goal for this fiscal year. Under cross-currency swaps linked to debt issued in foreign markets, counter parties returned collateral as the currency fell, giving the bank "an immediate cash inflow", Mr Moscati said.

"It actually reduces the amount of debt you need to issue offshore."

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 outweighed any negative effects, Mr Moscati said.

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