by Dr. Andrew D. Schmulow
Financial World, published electronically by The London Institute of Banking & Finance in association with the Centre for the Study of Financial Innovation (CSFI).
In the wake of a series of Australian financial scandals, Andy Schmulow urges the government to ensure that reports on regulators’ performance are made public.
Australia is wrestling with the aftermath of 10 years of eye-popping financial scandals. Major institutions misappropriated billions – some estimates put remediation at more than AU$7bn. They lied to regulators with regularity and impunity. There was large-scale money-laundering – Commonwealth Bank alone breached compliance legislation 53,700 times – and there was regulatory capture of a kind that would make Wall Street raiders blush. Now, Australia’s Hayne Royal Commission (the Financial Services Royal Commission – FSRC) recommends a board of oversight to carry out ongoing reviews of the regulators – the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority. Yes, unfortunately, a regulator is needed to regulate the regulators. There are two main reasons why.