Financial Regulation In Australia: Who Should Regulate The Regulators?

Dan Fitts and Stuart Gregory

Key Point

• In this article we discuss potential reform of the way in which Australia's financial markets are regulated.

Oversight of the financial regulators in Australia is minimal but its importance is recognised. Broadly speaking, financial regulation is divided between four agencies, which have discrete responsibilities to achieve the regulatory objectives outlined below. They are:

• the Reserve Bank of Australia ("RBA"), charged with ensuring system stability;
• the Australian Prudential Regulation Authority ("APRA"), which develops and enforces prudential standards to reduce the risk of institutional failure in the banking and insurance sectors;