Australian banking regulator has funding cut despite sector scandals
The Australian Securities and Investments Commission (ASIC), the country’s corporate regulator, has been told its current funding is to be cut over the next four years, at the same time as it is overseeing one of the country’s largest ever inquiries into corporate malpractice.
The national regulator, which has been criticised for not being tougher on the country’s major banks, is likely to be weakened by the move, which will see it lose 8% of its central government income over the next four years, to A$320m.
The funding reduction comes at a time when a Royal Commission inquiry is underway with the task of uncovering misconduct in the financial sector, which in some cases was ongoing for several years before coming to light.
Thomas Clarke, a business school professor at the University of Technology, in Sydney, told Reuters: “These cuts are not large cuts but they’re significant in the public’s mind and they’re significant for the morale and strength of resolve of the regulators concerned.
“One of the principal lessons of the Royal Commission in recent weeks has been ASIC’s toothless handling of the banks over the last ten years…I think the public will interpret this budget cut as giving up on ASIC to some extent, which is exactly the wrong signal.”