clarifying and broadening card interchange regulation and lowering interchange fees. The government’s response to the FSI Final Report followed most of the recommendations. Significant progress has been made on implementation since that time, including: implementation by the Australian Prudential Regulation Authority (APRA) in 2016 of changes to mortgage risk weights for ADIs using model-based weights the recent announcement by APRA of changes to capital requirements to ensure that Australia’s banks are ‘unquestionably strong’ establishing an expectation that regulators report each year on how they have taken account of competition in their decisions establishing a regulatory framework for crowdsourced equity funding, allowing small business greater access to capital – the government is currently seeking to extend the framework to proprietary companies establishing an independent review to recommend an approach to establishing an open banking regime in Australia supporting the uptake of the current voluntary comprehensive credit reporting regime; a failure to meet a target of 40 per cent voluntary reporting by the end of 2017 will result in the government legislating a mandatory regime establishment by the Reserve Bank of a revised regime for interchange regulation, which has broadened the application of regulation and lowered interchange fees (see the ‘Competition in the Payments System’ chapter). In addition, as part of the 2017/18 Budget, the Australian Government announced measures: establishing a dedicated unit within the Australian and Competition and Consumer Commission to undertake regular in-depth inquiries into specific financial system competition issues legislating an enhanced ‘regulatory sandbox’ to allow businesses to test for a period of 24 months a wide range of new financial products and services . Further, in August APRA initiated a consultation on the possibility of introducing a phased approach to authorisation, which would provide a restricted licence while an entity is developing the full range of resources and capabilities necessary to meet the requirements of the prudential framework. Collectively these measures suggest substantial progress on further enhancing competition in the financial system since the 2014 FSI Final Report.
clarifying and broadening card interchange regulation and lowering interchange fees. The government’s response to the FSI Final Report followed most of the recommendations. Significant progress has been made on implementation since that time, including: implementation by the Australian Prudential Regulation Authority (APRA) in 2016 of changes to mortgage risk weights for ADIs using model-based weights the recent announcement by APRA of changes to capital requirements to ensure that Australia’s banks are ‘unquestionably strong’ establishing an expectation that regulators report each year on how they have taken account of competition in their decisions establishing a regulatory framework for crowdsourced equity funding, allowing small business greater access to capital – the government is currently seeking to extend the framework to proprietary companies establishing an independent review to recommend an approach to establishing an open banking regime in Australia supporting the uptake of the current voluntary comprehensive credit reporting regime; a failure to meet a target of 40 per cent voluntary reporting by the end of 2017 will result in the government legislating a mandatory regime establishment by the Reserve Bank of a revised regime for interchange regulation, which has broadened the application of regulation and lowered interchange fees (see the ‘Competition in the Payments System’ chapter). In addition, as part of the 2017/18 Budget, the Australian Government announced measures: establishing a dedicated unit within the Australian and Competition and Consumer Commission to undertake regular in-depth inquiries into specific financial system competition issues legislating an enhanced ‘regulatory sandbox’ to allow businesses to test for a period of 24 months a wide range of new financial products and services . Further, in August APRA initiated a consultation on the possibility of introducing a phased approach to authorisation, which would provide a restricted licence while an entity is developing the full range of resources and capabilities necessary to meet the requirements of the prudential framework. Collectively these measures suggest substantial progress on further enhancing competition in the financial system since the 2014 FSI Final Report.
sub029-financial-system.docx