The government has released its consultation paper on the proposed Banking Executive Accountability Regime, first announced in May’s federal budget.
Treasury has released a 20-page consultation paper on its Banking Executive Accountability Regime, referred to throughout by its acronym BEAR, giving the industry exactly three weeks to respond.
The new regime, first announced in the May 2017 federal budget, will require bank directors and senior executives to be registered with APRA prior to their appointment.
APRA will have stronger powers to remove directors and senior executives from their positions under BEAR. The prudential regulator will also have the power to defer the 'variable' component of executives' remuneration.
A minimum of 40 per cent of an authorised deposit-taking institution (ADI) executive's variable remuneration (and 60 per cent of a chief executive's) will be deferred for a minimum period of four years under BEAR.
"APRA will have stronger powers to require ADIs to review and adjust remuneration policies when APRA believes these policies are producing inappropriate outcomes," said Treasury.
The government's stated objective for BEAR is to "make it easier to hold senior individuals to account for their behaviour in carrying out their responsibilities", according to the consultation paper.
"The net should not be cast so wide that responsibility can be deflected and accountability avoided. The risk is that if everybody is responsible, nobody will be accountable," said Treasury.
Announcing the details of the regime, Minister for Financial Services Kelly O'Dwyer said "recurring scandals" have demonstrated that banks are not operating at the high standards the community expects of them.
"It is important that there are mechanisms in place to deter poor behaviour and ensure that banks are held to account where they fail to meet the standards expected of them," Ms O'Dwyer said.
Submissions to Treasury on the BEAR consultation paper are due by 3 August 2017.
SUBSCRIBE TO THE IFA DAILY BULLETIN
23 Feb 2018Global managers added to OneVue platformBy Staff Reporter
23 Feb 2018BT adds new insurers to APLBy Staff Reporter
23 Feb 2018Fintech a risk to specialist advisersBy Killian Plastow
23 Feb 2018No 10-year rule, FASEA confirms to FPABy Aleks Vickovich
22 Feb 2018Registered tax adviser numbers return to 19,000By Staff Reporter
22 Feb 2018AMP adviser banned for charging dishonest feesBy Staff Reporter
- view all