Defined Terms and Documents    

Australia Has Three Financial Services Regulators or Three Federal Government Bodies That Regulate Financial Services

1.        Australian Prudential Regulation Authority (APRA)

2.        Australian Securities and Investments Commission (ASIC)

3.        Reserve Bank of Australia:         

Senior representatives of the RBA, APRA, ASIC and the Department of the Treasury comprise the Council of Financial Regulators.

Below is a extract from Interest rates and informed choice in the Australian credit card market  - December 2015 where the Economics Reference Committee asserted that ACCC is responsible to monitor and regulate bank interest rates, except the Overnight Cash Rate:

"1.8 Dr Edey quite rightly made the point that Australia does not regulate interest rates, and, as such, there is no interest rate regulator.  He told the committee that Australia does have 'an ACCC [Australian Competition and Consumer Commission] that can investigate uncompetitive conduct if they see it, but they clearly have not seen it in this market'.3   It was put to Dr Edey that the issue was not so much whether there was uncompetitive conduct in the market, but whether regulatory settings were conducive to the promotion of sufficient competition to put downward pressure on credit card interest rates.4  In part, the committee's inquiry has been directed at understanding whether existing regulatory settings in relation to credit cards are appropriate in this respect.  More broadly, the committee has sought to determine what might be done to improve competition in the credit card market or otherwise put downward pressure on credit card interest rates."

The above extract from an address by Dr. Malcolm Edey (RBA) contradicts the below indented extracts from Reserve Bank of Australia Bulletin  -  July 1998 - Australia’s New Financial Regulatory Framework that chronicles the Reserve Bank's powers, set out in the Payment Systems (Regulation) Act 1998, that allow the Reserve Bank to undertake more direct regulation of ‘designated’ payments systems to "... promote competition in the market for payments services, consistent with the overall stability of the financial system..." when it judges it to be "in the public interest" which may involve the imposition of access rules or operating standards for participants in such systems:

"The new Payments System Board is responsible for the Bank’s payments system policy, the objectives of which are:

•     controlling risk in the financial system arising from the operation of the payments system;

•     promoting the efficiency of payments systems; and

•     promoting competition in the market for payments services, consistent with the overall stability of the financial system.

The Bank’s powers in this area, set out in the Payment Systems (Regulation) Act 1998, allow it to undertake more direct regulation of ‘designated’ payments systems when it judges it to be in the public interest. This may involve the imposition of access rules or operating standards for participants in such systems. The Act also provides a framework for regulation of purchased payment facilities, such as travellers cheques and stored-value cards."

Watchdogs quiet as banks gouge credit cards  -  Daily News  -  2 June 2015

Wallis Inquiry report noted:

*          "The ACCC and the Payment System Board should monitor the delivery fees charged on credit and debit cards while the ACCC should monitor the rules of international credit card associations to ensure they are not overly restrictive.

*          "Fifth, accountability requires that regulatory agencies operate independently of sectional interests, be subject to regular reviews and evaluations and be open to scrutiny by their stakeholders."

*          "There is scope for increased competition in the payments system which will help to lower its costs of operation. However, this must be balanced against the need to maintain stability in the financial system. The payments system provides one central way in which instability can be generated.  The RBA should retain overall responsibility for the stability of the financial system, the provision of emergency liquidity assistance and for regulating the payments system."

 

The U.S. Center for Responsible Lending's Paper dated May 2012 titled "Unsafe, Unsound for Consumers and Companies" found that "Regulators and lawmakers should think of consumer protections and of safety and soundness as flip sides of the same coin.  Ending practices that undermine market transparency is essential for strong banks and a vibrant economy."