Mutuals: the prudential regulator’s view

One of the themes of Mutuals 2013 has been regulatory risks.

So the views of the APRA chair John Laker in his final speech to mutuals in that position were worth hearing.

Some of the points he made in his formal speech and the subsequent panel discussion were:

  • In denying APRA has an agenda to exit small ADIs he said: “We want…a vibrant and healthy mutual ADI sector made up of well-capitalised and well-managed mutuals that can “punch their weight” in a tough competitive environment. A sector that also provides room for smaller ADIs that have found their competitive niche. At the same time we do not shirk from difficult conversations with a Board of an ADI whose strategy and performance have left the ADI in the position where its members’ best interests would be served through its orderly exit from the industry.”
  • In rejecting the proposition that it is APRA’s role to create a level playing field for mutual ADIs he said “there is only one class of ADI and all are treated equally. There are no first class and second class ADIs. But the prudential system is not designed to create a level playing field.”
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