The first round of a major overhaul of the Australian Financial Services Commission was a success, with the final results being announced by the prime minister on Wednesday.
The commission was supposed to be a permanent body with a new chairman, but it was scrapped by the previous Labor government after it was found to be too political and a “political takeover”.
The first phase of the overhaul had been expected to be completed in the first quarter of 2019, and the second phase, the financial services overhaul, will be completed later this year.
The overhaul was supposed the government could have a final say over whether the state of the industry would be safe from a global crisis.
However, the reforms were criticised by industry groups, including the Australian Banking Association, and by some conservative MPs who accused the government of not having a clear plan for the sector.
The banking sector is one of the most vulnerable to financial crisis and it has been a major target of the Labor government.
Under the reforms, the commission will be responsible for oversight of the sector and will be empowered to “reconsider or amend the way in which the industry operates”.
The reforms also have the support of the Senate crossbench, which has supported them since they were announced in June.
The changes include requiring all banks to keep records of their lending activities and making it easier for customers to complain about a banking error, as well as making it tougher for people to sue the industry for failing to provide adequate customer services.
The first round was criticised by some conservatives as too political, and some conservative MP said it was too late for the industry.
“It’s about more than just banking, it’s about the future of the banking industry,” Senator Cory Bernardi said.
“The industry has to have a role in Australia.”
He said the reforms would also bring greater accountability to the sector by giving it greater power to hold institutions to account.
While the new rules do not address the banking crisis, Senator Bernardi is expected to sign a letter to the bank regulator that will signal the end of the bank bailout.
He also said he hoped the new changes would allow the industry to survive a global financial crisis.
Topics:business-economics-and-finance,government-and/or-politics,business-government,finance-and-$1,banking,wealth-fund-management,australiaFirst posted March 08, 2020 09:34:13Contact Michelle DoolanMore stories from New South Wales