APRA points to super funds lagging on crisis planning

There are gaps in the credibility of financial contingency planning for Australian banks, insurers and superannuation funds, with super funds particularly lagging, according to the Australian Prudential Regulation Authority (APRA).
The regulator has written to the banks, insurers and superannuation funds outlining the issues at the same time as opening up a new round of consultation on prudential standards aimed at strengthening preparedness to respond to a future financial crisis.
“Despite improvements in line with APRA’s supervisory guidance on recovery and exit planning over recent years, there remain significant gaps in the credibility of financial contingency planning at APRA-regulated entities,” the regulator said.
“For banks and insurers, progress has been made over a number of years, though material inconsistencies between levels of readiness remain.”
“In the superannuation industry, financial contingency readiness is considerably further behind. APRA is introducing new prudential requirements to improve the level of readiness across all APRA-regulated industries and ensure all entities continuously meet minimum standards in planning for financial stress events,” APRA said.
Commenting on the move, APRA deputy chair, John Lonsdale said the disorderly failure of an APRA-regulated entity could have a significant impact on the economy and society.
“Although Australia has one of the strongest and most stable financial systems in the world, and failures are extremely rare, businesses in any competitive market can face financial difficulties. Should that happen, we want to be sure each entity has the capability to either recover, or manage an orderly exit with the smallest possible impact on the community and the financial system.
“APRA-regulated entities have made substantial improvements in contingency planning over recent years, however there remain large gaps in capabilities between entities and across industries. By laying out a consistent, transparent and enforceable framework, APRA will be better able to strengthen crisis preparedness and close those gaps,” Lonsdale said.
Dont worry Frank, I'm sure the cost of this investigation and action will be incorporated into our annual levy. #GoGetThemTiger
ASIC couldn't be bothered scrutinising the misleading names of their investment options? Eg. Balanced fund but over 90% invested into…
I'm just curious - would the cost of ASIC pursuing this be greater than what is being paid?
Hi ASIC, please clarify exactly how much time, effort and resources were used for this investigation and infringement notices ?…
Any fines only come from members funds, or investment earnings reserves. It actually NEVER costs Industry Super anything directly.