The lessons of the global financial crisis shouldn't be allowed to fade too quickly, according to Australian Prudential Regulation Authority (APRA) Chairman John Laker.

He says prudential regulators, as well as policymakers and financial services companies, should be "determined not to repeat the mistakes of history".

Dr Laker told the Australian Economic Forum in Sydney last week that APRA does not involve itself in shareholder issues, but counts insurance policyholders among its "beneficiary groups". He says the shortcomings of some financial dealings "are now clear in the cold light of day".

"It may well be that many boards became transfixed by the shift in risk management practices towards more quantitative or models-based approaches," he said.

"There are dangers for prudential regulators that oversee their institutions' risk profiles and risk management practices and, in benign conditions, can also get caught up in the misperception of risk, particularly in complex and innovative products.

"The heightened emphasis on rigorous stress-testing now being built into regulatory frameworks is intended to stiffen the spines of boards, risk managers and prudential regulators alike and act as an antidote to any early outbreak of post-crisis complacency."

Criticising remuneration arrangements in some major financial companies "that paid insufficient regard to longer-term risks and encouraged executives to roll the dice on leverage, volume growth and risk controls", Dr Laker says APRA's proposed framework for governance emphasises that the entire board is accountable for decisions taken on remuneration, which must be aligned with prudent risk-taking.