The Australian Prudential Regulation Authoritys 2000 Annual Report documents a highly productive year. In addition to prudentially regulating nearly 85 per cent of Australias financial sector assets, APRAs focus was on consolidating administrative responsibilities and structures and developing policy initiatives.

In its second year, APRA became the prudential regulator of all authorised deposit-taking institutions (ADIs) when it took on responsibility for credit unions, building societies and friendly societies in July 1999, in addition to its banking, insurance and superannuation responsibilities. After many months of extensive preparation, the Australian Taxation Office has taken over the regulation of self-managed superannuation funds.

APRAs major policy initiatives in 1999/2000 included:

harmonising prudential standards across all ADIs;

commencing a major review of prudential supervision arrangements for general insurers; and

substantially completing a comprehensive supervisory framework for conglomerate groups that contain an ADI.

The financial sector is very sound, showing strong growth and profitability in 1999/2000. Most prudential concerns were relatively minor. The general insurance and domestic reinsurance sectors continued to show strain from last years natural disasters but domestic policyholders have not experienced any losses.

Internationally, APRA has been active in the International Association of Insurance Supervisors, the Joint Forum on Financial Conglomerates and the International Association of Actuaries. APRA staff also contribute to the work of the Basel Committee on Banking Supervision and are represented on its Core Principles Working Group. In May, staff took part in the second Conference of Integrated Financial Supervisors, a new grouping APRA helped to establish in 1999.

On the domestic scene, APRA continued to develop close working relationships with other regulators such as the Australian Securities and Investments Commission and the Reserve Bank.

For further information contact:

Gloria Peterson
Public Affairs Manager
02 9210 3385