October 18, 2018 / 11:44 PM / a month ago

Australian regulator says bigger stick needed to clean up financial sector

SYDNEY, Oct 19 (Reuters) - Australia’s corporate regulator said on Friday it needed to be better resourced if it is to meet government expectations that it do more to tackle widespread misconduct highlighted by the misconduct inquiry into the financial sector.

James Shipton, chair of the Australian Securities and Investments Commission (ASIC), said he understood that the regulator must pursue more meaningful penalties against any wrongdoing, but said “expectations must be balanced against reality”.

“Now is the right time to ask whether ASIC should be resourced differently to meet the community’s expectations and the unique challenges of Australia’s financial system,” Shipton told lawmakers in Canberra.

A scathing interim report from a commission of inquiry last month found that Australian regulators had failed to properly punish rule-breaking by some of the country’s biggest financial institutions.

In particular, the inquiry found ASIC was too quick to negotiate settlements with banks following breaches.

The year-long inquiry is due to deliver its final recommendations in February, which could include tougher regulation and civil or criminal prosecutions.

Reporting by Colin Packham in SYDNEY; Editing by Stephen Coates

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