Australia’s Banking Regulatory Bodies: The Council of Financial Regulators (CFR)

The Council of Financial Regulators (CFR) plays a vital role in promoting stability and effective regulation in Australia’s financial system. As a non-statutory body, the CFR is comprised of four key members:

• Australian Prudential Regulation Authority (APRA)
• Australian Securities and Investments Commission (ASIC)
• Reserve Bank of Australia (RBA)
• The Treasury

Objectives and Charter

The CFR’s charter outlines its objectives, which include promoting financial stability, efficiency, and competitiveness by:

• Identifying key issues
• Exchanging information
• Harmonizing regulatory requirements
• Ensuring coordination during times of financial instability

Despite lacking legislative backing, the CFR plays a crucial role in fostering cooperation among its member agencies. Its Memorandums of Understanding (MoUs) with member agencies cover critical matters such as:

• Information sharing
• Prompt notification of regulatory decisions
• Consultation arrangements in the event of financial disturbances
• Financial distress management

Cooperation and Governance

The CFR’s focus on cooperation is further underscored by overlapping representation on relevant governance committees. For example:

• The APRA Chairman represents APRA on the Payments System Board of the RBA.
• The Secretary to The Treasury is a member of the RBA Board.

Trans-Tasman Cooperation

Given the significant financial ties between Australia and New Zealand, the CFR places considerable emphasis on coordinating trans- Tasman crisis resolution and planning arrangements through the Trans- Tasman Council on Banking Supervision (TTBC).

In conclusion, the CFR is a critical coordinating body for Australia’s major financial regulatory agencies. Its efforts to promote cooperation and stability in the country’s financial system are essential for maintaining a healthy and thriving economy.