SUBJECTS: ASIC to take over supervision of Australia's financial markets from 1 August 2010
KY CHOW:
Do you expect market supervision will improve as a result?
CHRIS BOWEN:
Look, I don't think it's a matter of improvement. I think ASIC is the appropriate body to regulate Australia's financial markets and it does mean that Australia's financial markets are ready then for competition with ASIC as the regulator. I think ASIC will do a very good job as the regulator. I have no criticisms of the job the ASX has done in the past.
CHOW:
So why do we need a change then?
BOWEN:
Well, I think it's more appropriate that a government organisation undertake the regulation, and as I say, I think it was an important first step in moving towards competition. They're the reasons for that regulatory change.
CHOW:
As you've said yourself, though, ASIC has come under criticism itself. Is this just an ideological change? Will things really get better?
BOWEN:
No, they'll do a good job. They'll do an appropriate job. They're a good organisation and appropriately resourced. The reason for the change, as I say, was that it was more fitting to have it undertaken - it's an important regulatory role - more fitting to have it undertaken by a government organisation, and it was unsustainable to have the ASX supervising the market if we were going to move to competition, as we've done. So for those reasons, ASIC will be the regulator. It's not a matter of thinking the ASX has done a poor job, because I don't have that view. I think ASIC will do a good job, as I think the ASX did a good job.
CHOW:
If you are in favour of more regulation like this, do you think it is contributing to the perception that Australia's Government is becoming more interventionist?
BOWEN:
No, I don't think so. I think that, for example, the market integrity rules are very similar to the ASX's. I have not had anybody in Australia or overseas argue to me that this is some case of Government regulatory overreach. I think they see it as particularly appropriate that ASIC do this form of regulation, and Australia has a very stable and well respected regulatory environment, and I expect that to continue.
CHOW:
Do you think that this increased regulation across the world is just a symptom of the GFC? Would we be seeing any of these reforms if it wasn't for that?
BOWEN:
Well, of course there's been a regulatory response to the global financial crisis, no question about that. We see that through the G20 and through the Basel Process, and you're going to continue to see that. We've taken the view in Australia that we need to be a part of that. We're also very cognisant of the fact that Australia's regulatory settings worked during the global financial crisis, and therefore we need to have a view to Australian circumstances in all those discussions. But of course events of the last few years have concentrated the minds of policy makers to ensure that our regulatory settings are correct.