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Defined Terms and Documents
RBA has made
efforts to divest itself of its
Parliamentary Bestowed Mandate by seeking to
pass its obligations to regulate 'inter alia' interest rates on
Credit Cards to
-
* Australian Prudential Regulatory Authority (APRA); and
* Australian Securities and
Investments Commission (ASIC).
Notwithstanding, the RBA is still bound by
its
Parliamentary Bestowed Mandate
ACCC recommends Reserve Bank
consider using powers to reform credit card schemes - 21 March 2001
The Chairman of the ACCC wrote to the Governor of
the Reserve Bank in March 2001 recommending that the
Payments System Board consider using the powers
available to it, under the Payment
Systems (Regulation) Act 1998, to achieve reform of the credit card
schemes in Australia in the public interest. After consultation with a range of
interested parties, the Board took the decision to bring credit card schemes in
Australia under the Reserve Bank's regulatory oversight. In April 2001, the
Reserve Bank formally ‘designated’ the credit card systems operated in Australia
by Bankcard, MasterCard and Visa as payment systems subject to its regulation
under the Payment
Systems (Regulation) Act 1998.
Dr. H C Coombs must have
been a visionary because his above quote
"Come the
Revolution, you will be hanged........"
was made well prior to
the below maize of corporate and regulatory
structures more recently sanctioned by Australia's
senior banking regulator, the RBA, to defray its
responsibility pursuant to
its
Parliamentary Bestowed Mandate.
"Memorandum of Understanding
- The Reserve Bank of Australia and the Australian
Prudential Regulation Authority - 12 Oct 1998
The Reserve Bank and the
Australian Prudential Regulation Authority (APRA)
today released a Memorandum of Understanding
covering their respective responsibilities for
promoting the stability of the Australian financial
system.
Under Australia's new
financial regulatory framework, the
Reserve Bank
retains responsibility for monetary policy and the
maintenance of overall financial system stability,
including stability of the payments system. APRA is
responsible for the prudential supervision of banks,
life and general insurance companies and
superannuation funds. If the State and Territory
Governments agree, APRA will also be responsible for
the prudential supervision of building societies,
credit unions and friendly societies.
The Memorandum of
Understanding sets out a framework for co-operation
between the Reserve Bank and APRA, and covers such
matters as information sharing and consultation
arrangements for the handling of threats to system
stability.
The Memorandum is attached.
Copies are also available on the web sites of the
Reserve Bank and APRA."
(How can the RBA abrogate its
Parliamentary Bestowed Mandate
....that
the powers of the Bank ...
are exercised in such a manner as, in the opinion of the Reserve Bank Board,
will best contribute to ......
the economic prosperity
and welfare of the people of Australia"
by seeking to delegate its responsibility to
APRA which is a company whose interests are
'conflicted' because the subrogate authority that
is supposed to oversee the behaviour of the banks
are
the same financial institutions that pay
APRA's
supervision costs. Self-regulation is no
regulation.)
APRA was established on 1 July 1998. It is the prudential regulator of the
Australian financial
services industry. It oversees banks, credit unions, building societies, general
insurance and
reinsurance companies, life insurance, friendly societies and most members of
the
superannuation industry.
APRA operates under the Australian Prudential Regulation Authority Act 1998 and
its powers
derive from the Banking Act 1959, the Insurance Act 1973, the Life Insurance Act
1995 and
the Superannuation Industry (Supervision) Act 1993. The power to determine and
carry out
the policy of APRA is vested in its senior management (known as Members), who
are
appointed by the Government.
All authorised deposit-taking institutions (ADIs) (which include banks, building
societies and
credit unions) are supervised by APRA under one licensing regime and are covered
by the
same depositor protection provisions. If an ADI is, or is likely to be, unable
to meet its
obligations, APRA may assume control and carry on its business, or appoint an
administrator, until its deposits are repaid or APRA is satisfied that suitable
provision has
been made for their repayment. If APRA believes that the institution will be
unable to meet its
obligations within a reasonable time period, it has the power to wind it up and
distribute its
assets, with depositors having first claim. The Banking Act 1959 provides that
the Australian
assets of an ADI shall be available to meet deposit liabilities in Australia in
priority to all other
claims, conferring a depositor repayment preference in the event of
liquidation.
APRA and the RBA have agreed a Memorandum of Understanding. APRA has a
representative on the Payments System Board.
About ASIC
The Australian Securities and Investments Commission (ASIC)
is the 'corporate regulator' which regulates
financial advice and financial products (including credit).
Our website for consumers and investors, MoneySmart, offers you free and
independent tips and safety checks about the financial products and services we
regulate.
Visit www.moneysmart.gov.au or call ASIC’s Infoline on 1300 300 630.
ASIC was established on 1 July 1998. It has responsibility for market integrity
and consumer
protection across the financial system, including payment transactions. It
administers the
Corporations Act 2001 and regulates Australian corporations, financial markets,
clearing and
settlement facilities (in conjunction with the RBA ¡V see Section 1.2.2) and
financial service
providers. The functions of ASIC include the oversight of financial market and
clearing and
settlement facility licensees, licensing of financial service providers
(securities dealers and
advisers), registration of auditors and liquidators, and investigating and
enforcing corporate
and securities law. A Memorandum of Understanding sets out a framework for
cooperation
between ASIC and the RBA.
The Australian Securities and Investments Commission (ASIC) has responsibility
for
market integrity and consumer protection across the financial system, including
payment
transactions. ASIC and the RBA both have responsibilities in relation to
clearing and
settlement facilities. A Memorandum of Understanding sets out a framework for
cooperation
between the two regulators in this area.
"As Australia’s corporate, markets, financial services
and consumer credit regulator, we strive to ensure that
Australia’s financial markets are fair and transparent,
and supported by confident and informed investors and
consumers. We do this by monitoring compliance with the
law and taking enforcement action where necessary. We
also provide services to businesses and individuals
through our registry, licensing and Client Contact
Centre facilities, which handle requests, inquiries and
complaints from consumers and businesses.
Parliament has given ASIC a range of compulsory
information-gathering powers to enable us to require a
person or entity to:
ASIC will be self-regulating
within two years.
"But
in two years, banks, super funds, insurance companies and publicly listed
companies will cover ASIC's budget - now about $330 million a year - delivering
a saving to the budget bottom line of more than $1 billion over the four years
from 2018-19."
Consumer advocates back expanded powers for ASIC to probe banks
June
1, 2015
ASIC’s compulsory information gathering powers.
Extract
from COUNCIL OF FINANCIAL REGULATORS ANNUAL REPORT - 2001
The Council of Financial
Regulators is the co-ordinating body for Australia’s main
financial regulatory agencies:
* Reserve Bank of Australia (RBA), which chairs the Council;
* Australian Prudential Regulation Authority (APRA); and
* Australian Securities and Investments Commission (ASIC).
The Council’s role is to contribute to the efficiency and effectiveness of
financial regulation by providing a high-level forum for co-operation and
collaboration among its members. It operates as an informal body in which
members are able to share information and views, discuss regulatory reforms or
issues where responsibilities overlap and, if the need arises, co-ordinate
responses to potential threats to financial stability. These arrangements
provide a flexible, low-cost approach to co-ordination among the main financial
regulatory agencies. The Council is non-statutory and has no regulatory
functions separate from those of its members.
Why does the Payments System Board of the
Reserve Bank believe that it has no regulatory power to seek Credit Card Issuers to provide
financial data which identify the demographic cohorts that contribute 80%
circa of Interest And Penalty Fees Revenue?
HISTORY
In June 1996, the Financial System Inquiry (known as the Wallis Inquiry) was
established to examine the results of the deregulation of the Australian
financial system, to examine the forces driving further change, particularly
technological and recommend changes to the regulatory system to ensure an
'efficient, responsive, competitive and flexible financial system to underpin
stronger economic performance, consistent with financial stability, prudence,
integrity and fairness.
At the time, the regulators of the Australian
financial services industry were
based on the institutions and not the regulatory function.
APRA's predecessor regulators were -
-
Insurance and Superannuation Commission (ISC)
-
Reserve Bank of Australia; and
-
Australian Financial Institutions Commission (AFIC).
The Wallis Inquiry recommended a new structure.[1] The
Reserve Bank of Australia (RBA) was to deal with monetary
policy and systemic stability
with the Payments System Board considering payments systems regulation.
The Australian Prudential Regulation Commission (APRA) was to deal with
prudential regulation of Authorised
Deposit-Taking Institutions (ADIs),
life and general insurance and superannuation (including Industry
superannuation)
The Corporations and Financial Services Commission (a renamed and expanded
Australian Securities & Investments Commission (ASIC) ) was to deal with market
integrity, consumer protection and corporations.
APRA was established on 1 July 1998 under the Australian
Prudential Regulation Authority Act 1998. APRA became prominent in the
collapse of HIH
Insurance in 2001 and for its
investigation into the National
Australia Bank foreign currency
deal scandal in 2004.
"In
recent years ASIC has taken enforcement action against three credit card issuers
– GE Money, Commonwealth Bank and Westpac – for breaches of responsible lending
laws. Both Commonwealth Bank and Westpac were caught sending unsolicited
invitations to credit card customers to raise their debt limits. Such
marketing tactics were prohibited under responsible lending reforms introduced
in 2012."
"The Bank
determined that it would be in the public interest to designate these
systems (bank‐issued American Express
companion card system, the Debit MasterCard system and the eftpos,
MasterCard and Visa prepaid card systems)
and, following a resolution of the Board, did so in October. The designation
of a system is the first of a number of steps that the Bank must take to
exercise any of its powers, such as imposing an access regime or setting
standards."
See:
*
Parliamentary Bestowed Mandate
*
Australia's Principal Regulator of the Payments
System
* Some facts about the Reserve Bank of Australia
* Reserve Powers of the RBA
* Monetary
Policy
*
Payments System Board
* Some facts about the Reserve Bank of Australia
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