Australia sticks with banking regulator head despite shortcomings of sector

SYDNEY (Reuters) – Australia’s treasurer reappointed the head of the country’s banking regulator on Monday and lifted its funding, even though a powerful public inquiry found the watchdog wanting.

The Australian Prudential Regulatory Authority (APRA) will be given an extra A$58.7 million ($42.2 million) over four years and Wayne Byres will remain its chairman until 2024, treasurer Josh Frydenberg said in a statement.

The authority was criticized by the inquiry, called a Royal Commission, in September for its part in failing to pick up or punish problems across the industry ranging from billing the dead to aggressive loan selling.

The Commission found in its interim report that a culture of greed and widespread misconduct in the finance sector was allowed to develop, while APRA and the corporate regulator, the Australian Securities and Investments Commission, were too soft.

APRA rejected that criticism and said it was mandated o focus on material risks to banks’ stability rather than their treatment of customers, but added its resources were tight.

The reappointment, announced nine months ahead of the expiry of Byres’ current term, and the funding was “important for stability during this time of reform”, Frydenberg told the Australian Financial Review newspaper.

Byres was first appointed to head the regulator in 2014 and had worked there for 13 years between 1998 and 2011.

The Commission has shredded the finance sector’s reputation and value, with some A$60 billion ($43 billion) wiped from the market capitalization of Australia’s four largest banks and wealth manager AMP Ltd (AMP.AX) since it was announced.

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