Government rejects “wholesale reform” after crisis

The Federal government has rejected “wholesale reform” in the wake of the global economic crisis.

The Financial Services Minister Chris Bowen made the declaration in a television interview he gave in Hong Kong.

He said such matters were  always “a matter of balance.”

But Australia’s response to the crisis had been “very robust.”

“We haven’t had any runs on any regulated financial institutions , Mr Bowen said.

“And four out of the nine AA-rated banks around the world are Australian banks

“So we do take the view that our regulatory systems worked well and that there is not a case for wholesale reform,” Mr Bowen said.

His declaration will surprise many.

The government has, for example, ordered a complete review of Ausrralia’s taxation system.

It also ordered a slew of reports on Australia’s superannuation system, in the wake of big losses thousands of newly retired Australians suffered, over the past year, as a  direct result of the stock market crash in September 2008.

The report on Australia’s taxation system, produced by  the Secretary of the Treasury, Ken Henry, has now been completed and handed to the government.

But it has not been published.

However four reports, on the rules governing superannuation, have been published.

They are now being considered by the government.

Mr Bowen confirmed, though, that Australia is working with other governments, on changes that may need to be made.

“Of course, we’re working with our colleagues in the G20 on matters of financial and prudential regulation,” Mr Bowen said.

“And APRA, our prudential regulator, is going through the process of reviewing our liquidity requirements.

“We’re doing that in consultation with the financial services sector,” he added.

Mr Bowen said Australlia has both  a prudential regulator, the Australian Prudential Regulation Authority  and a corportate regulator, the Australian Securities and Investment  Commission, with the Reserve Bank keeping an overall watch.

“We find the right balance in Australia, for us, is the twin peaks model , two regulators…” he said.