APRA, ASIC “captured” by banks

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This is old school AFR from Alan Mitchell:

Economists call the problem “regulatory capture” and, as well as being under-resourced, it seems the financial sector’s main regulators, APRA and ASIC, may have fallen prey to it.

None of these problems are new. The failures of governments and regulators to protect the public from the behaviour of industry have been well documented. One of the most striking examples is the failure of governments to act on the health risks posed by asbestos, as described by the University of California’s Michelle White.

…The most effective protection from asbestos came from litigation, after the courts shifted responsibility for dangerous and defective products on to the producers. With a rising tide of scientific evidence against asbestos and the removal of artificial barriers to workers compensation claims for asbestos-related illness, the 1970s brought an explosion of law suits.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.