The Australian Prudential Regulation Authority (APRA) has published remarks delivered yesterday evening by APRA Chair Wayne Byres to the AMF-BCBS-FSI High-level meeting on the post COVID-19 banking system.
Lessons from the pandemic for financial regulation and supervision
Lesson 1: A strong foundation is essential
The first lesson is a statement of the obvious, but one that always bears repeating: preserving a strong and resilient financial system in good times is valuable insurance for when a crisis hits.
Lesson 2: Be prepared for the unexpected
The second lesson is another fairly obvious one: be prepared for the unexpected.
Lesson 3: Third-party suppliers are increasingly critical to operational resilience
My third lesson relates to the need to better understand operational resilience, and particularly the potential vulnerabilities that emerge from third-party relationships.
Lesson 4: The value of data and transparency
My fourth lesson is on the value of good quality data and transparency.
Lesson 5: Have the courage to act counter-cyclically
Lesson five relates to the willingness and ability to act counter-cyclically in bad times.
Lesson 6: Don’t lose sight of bigger trends
View APRA Website
My last lesson is perhaps more of a note of caution… Technology, digitisation and new forms of finance have evolved considerably while we have had ‘all hands to the pump’ responding to the pandemic. Indeed, in many ways COVID-19 turbo-charged the digital shift already underway (retail payments being a particular case in point).