Chanticleer is expressing public doubts as besieged APRA chairman Wayne Byers couldn’t even front cameras yesterday, preferring a teleconference from his fortress of solitude:
This tight control of the dissemination of information and the strategic decision to avoid the nightly news sits oddly with the firm advice in the capability review for APRA to engage more deeply with the community.
But it was Byres’ response to the media questions which left Chanticleer in doubt about his willingness to fix all the weaknesses in the management and strategic priorities at APRA identified by the capability review.
The review panel chaired by Graeme Samuel and including Diane Smith-Gander and Grant Spencer must surely be disappointed with Byres’ response. But they have chosen to let the report stand for itself and will not be commenting publicly .
At The Australian via Adam Creighton, Byers is now an object of exasperated ridicule:
In most lines of work, if you do a poor job you don’t get a pay rise. You might even be laid off. Not in financial regulation La La Land, where poor performance comes with a five-year contract and a $17,000-a-year pay increase.
You might have thought a royal commission, a series of damning inquiries into the quality of the financial sector (it’s difficult to keep track) and now a highly critical capability review would have been enough for a round of applications late last year for the position of chairman of the Australian Prudential Regulation Authority.
Instead, Wayne Byres, in the job since 2014, was appointed in November for a further five years and, thanks to the Remuneration Tribunal, scored a pay bump to $886,770 a few weeks ago.
Not bad in the lead-up to a 146-page capability review that found APRA slow, opaque, inefficient, and in urgent need of a culture and leadership overhaul.
However technically competent and experienced Byres might be, it was a mistake to reappoint him last year. He would have found other important work.
And a fresh chairman from outside the financial regulation establishment could have set the regulator, one of the nation’s most important, on a new path. Byres is hardly going to be a critical reforming force of an organisation he’s been at since 1998.
We already know what front line APRA managers think, also at the AFR:
“When institutions are consistently able to get a different result by appealing to GM levels and above, line supervisors become demoralised and institutions become emboldened to push the limits,” one employee said.
…One employee speaking under the protection of anonymity said the biggest problem with the regulator was that there were “too many underperforming managers”.
…“In some pockets of APRA, staff do not have a high degree of trust that their managers would ‘back them’, that it would be safe to make a mistake, or that career-related outcomes are fair,” the report said.
Industry leader Banking Day sank the boot in:
Leaving diplomatic language for another time, the panel (chaired by Samuel) blasted the productivity, focus and effectiveness of APRA.
Wayne Byres, APRA’s chair, is encouraged (along with the three other APRA members) to take a whole of industry view and drop special responsibility for one industry sector; banking, in Byres case.
APRA “should change its existing internal norms that create a low appetite for transparent supervisory challenge and enforcement by departing from its behind closed doors approach with regulated entities,” the panel demanded.
The panel also called for APRA to “adopt a stronger approach towards recalcitrant institutions … building organisational confidence …. And increasing its risk appetite.”
Samuel’s review panel found the internal culture of the regulator wanting.
There is “a tendency towards conformity in APRA,” the panel found.
“In parts of the organisation there appears to be a culture that is challenged by robust debate and internal contestability” while there is “a patronage model of advancement.”
And the SMH rounds us off:
…central to the panel’s report was APRA’s intractability around transparency – or the recognition that allowing or ensuring negative information about financial services companies be released can improve safety not detract from it.
Allowing these 34 institutions to slip through the net only reinforces APRA’s image as a secretive regulator, that operates behind closed doors and does deals with those it regulates.
It suggests there are 35 institutions in denial – one of them is APRA.
Some well-placed chat suggests that at least one of the 34 self-assessees delivered little more than a blank sheet of paper to APRA – suggesting (unbelievably) that it had no issues.
The only way that Wayne Byers can contribute to reform now is by resigning and bringing the accountability. His position is no longer tenable.