The Australian Prudential Regulatory Authority (APRA) is reviewing the resources and governance structure around its enforcement powers after the Hayne royal commission questioned why it isn’t using its court-based sanction powers.

Speaking at the Senate economic legislation committee, APRA chairman Wayne Byres defended the regulator’s priorities as a supervision-led agency, with sanctions coming after prevention and rectification.

However, APRA will review its enforcement processes in light of the royal commission and the implementation of the Banking Executive Accountability Regime.

APRA has already flagged greater use of its enforcement powers to achieve greater deterrence across the industry.

It will also work with the Australian Securities and Investments Commission to consider how to more broadly examine the issues surrounding remuneration and poor incentives, Mr Byres says.

Newly appointed Deputy Chairman John Lonsdale will take control of APRA’s work on governance, culture and remuneration, and the issues that emerged at the royal commission. He will also be responsible for building the organisation’s crisis resolution capability.