Smaller banks have begun talks with the financial services regulator after they raised concerns about a shock change to the way they're supervised.
As Capital Brief revealed two weeks ago, the Australian Prudential Regulation Authority (APRA) has removed dedicated prudential supervisors for mutual banks despite acknowledging growing risks in the sector. Instead, it will rely on an inbox and supervisory panel.
The surprise move raised concerns about the quality of the relationship with the primary regulator and the timeliness of responses to emerging issues. It also comes amid mounting pressure for consolidation in the sector.
I caught up with the CEO of the Customer Owned Banking Association, Mike Lawrence, and he agreed APRA’s move had taken some members by surprise, adding he’d just met with the regulator.
