Australia’s banking industry has backed calls for financial regulators to give greater weight to economic growth, arguing that proportionate rules could help businesses access finance and create jobs.
The Australian Banking Association welcomed Shadow Treasurer Tim Wilson’s October 20 call for the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission to place more emphasis on growth in their decisions.
For Hawkesbury businesses considering expansion, new equipment or additional staff, access to affordable finance is an important part of turning those plans into reality.
ABA chief executive Simon Birmingham said regulation should address genuine risks while supporting investment.
“Banks want to back local businesses with the finance they need to grow and hire more Australians. When rules are focused on real risks, benefits flow through to a stronger economy,” he said.
The association also welcomed a focus on proportionate regulation for smaller and mid-sized banks, saying it could strengthen competition and give customers more choice.
“A more productive economy means higher wages and a better standard of living for Australians, and that’s what this is ultimately about,” Mr Birmingham said.
However, he acknowledged that a stronger emphasis on growth needed to preserve financial stability and customer protections.
“Getting the balance right is crucial. Banks recognise the need to ensure a stronger focus on growth is implemented in a way that maintains the strength and stability of Australia’s financial system and protections for customers.”
APRA’s role centres on the financial soundness of institutions such as banks, insurers and superannuation funds. ASIC oversees areas including financial services conduct, company regulation and consumer protection.
The ABA statement did not identify specific rules it wanted changed or quantify how the proposed approach would affect borrowing costs or lending to small businesses.
It represents the banking industry’s position on the policy debate, rather than an announcement of changed lending requirements.
Mr Birmingham said the next step was to translate the emphasis on growth into practical measures.
“Now it’s about turning the focus on growth into practical steps that cut unnecessary red tape. Banks will keep working constructively with APRA, ASIC and both sides of politics.”
