The Australian
Prudential Regulation Authority (APRA) is responsible for the
prudential regulation (or as the Americans call it the "safety
and soundness") of the banking sector. Any company that
engages in "banking business" (which under the Banking
Act 1959 (Cth) means accepting deposits and making loans) must,
unless it is covered by an exemption, be authorised by APRA and
comply with its prudential standards covering matters such as
capitalisation and risk management. Two such exemptions are for
registered financial corporations (RFCs) and religious charitable
development funds (RCDFs).
The global financial crisis of 2007 – 2008 reminded
regulators of the need for prudential regulation to keep up with
financial innovation and to ensure that investors in financial
products with bank-like features are appropriately protected.
Australia's prudential regulatory framework proved its worth
during what many economists called the biggest financial crisis
since the Great
