Treasury and the Australian Prudential Regulation Authority (APRA) have signed a Memorandum of Understanding regarding policy and operational co-ordination in areas of common interest.

Both organisations have key responsibilities in relation to the financial sector. Treasury advises the Government on policies and a framework of legislation and industry supervision that assist in increasing the efficiency, competitiveness and stability of Australias financial system. It is also responsible for advising the Government on retirement income policies, including in relation to superannuation.

APRA was established in July last year, with operational autonomy, to prudentially supervise banks and other deposit-taking institutions, life and general insurance companies and superannuation entities, and develop policies in the performance of that role.

The Memorandum of Understanding recognises the importance of close co-ordination and co-operation between the two organisations.

In particular, it provides for exchange of relevant information and regular consultation on issues of joint interest, including legislative matters pertaining to prudential regulation, significant policy changes, developments in the financial system and major issues related to individual financial institutions.

APRA has agreed similar arrangements with the Reserve Bank and the Australian Securities and Investments Commission in relation to co-ordination of their respective responsibilities.

The Memorandum of Understanding is attached.

For further information on this matter, please contact

Mr Ray Jones (Treasury)
(02) 6263 3849

or

Ms Thea Rosenbaum (APRA)
(02) 9210 3103.

5 February 1999