Twin Peaks 2.0: Reforming Australia's Financial Regulatory Regime in Light of Failings Exposed by the Banking Royal Commission

16 Pages Posted: 8 May 2019

See all articles by Andrew Schmulow

Andrew Schmulow

University of Wollongong, School of Law; Clarity Prudential Regulatory Consulting Pty Ltd; Oliver Schreiner School of Law; Centre for International Trade

Karen Fairweather

University of Auckland

John Tarrant

The University of Western Australia Law School

Date Written: November 12, 2018

Abstract

In November 2017 the Federal government established a Royal Commission in Australia’s financial services industry that has become widely known as the Banking Royal Commission. The Commission has, during its hearings and in its recent Interim Report, exposed serious misconduct and poor regulation in Australia’s financial services industry. The authors argue that the recommendation of the 2014 Financial System Inquiry that there be an Assessment Board to provide continuous oversight of the financial regulators, APRA and ASIC, is an effective solution to the regulatory failures exposed by the Banking Royal Commission. The benefits to Australia of the establishment of an Assessment Board are clear, and include enhanced accountability, improvements in the regulator’s culture, prevention of regulatory capture, and enhanced capacity to prevent financial crises. The introduction of an Assessment Board in Australia would serve as a timely and highly effective adjunct to the current Australian Twin Peaks financial regulatory architecture comprising APRA and ASIC.

Keywords: Twin Peaks, regulating the regulator, capture, good conduct, financial system, financial system architecture, Board of Oversight, Sentinel, Financial Regulator Assessment Board, Banking Royal Commission

Suggested Citation

Schmulow, Andrew and Fairweather, Karen and Tarrant, John, Twin Peaks 2.0: Reforming Australia's Financial Regulatory Regime in Light of Failings Exposed by the Banking Royal Commission (November 12, 2018). Available at SSRN: https://ssrn.com/abstract=3357415 or http://dx.doi.org/10.2139/ssrn.3357415

Andrew Schmulow (Contact Author)

University of Wollongong, School of Law ( email )

Northfields Avenue
Wollongong, New South Wales 2522
Australia

Clarity Prudential Regulatory Consulting Pty Ltd ( email )

Level 5, 306 Little Collins Street
Melbourne
Victoria, Victoria 3000
Australia

HOME PAGE: http://www.clarityprc.com.au

Oliver Schreiner School of Law ( email )

PBag X3, WITS
2050 Johannesburg
South Africa

Centre for International Trade ( email )

206 International Hall
Seoul 110-745, 110-745
Korea, Republic of (South Korea)

Karen Fairweather

University of Auckland ( email )

Private Bag 92019
Auckland Mail Centre
Auckland, 1142
New Zealand

John Tarrant

The University of Western Australia Law School ( email )

M253
35 Stirling Highway
Crawley, Western Australia 6009
Australia

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