The Australian Prudential Regulation Authority (APRA) is stronger as a result of having insurance as part of its brief, according to Chairman John Laker.

Australia’s regulatory framework was “widely judged” to be crucial to the financial system’s resilience during the global financial crisis, he says.

“One of APRA’s strengths is its integrated approach, which enables it to take a holistic, group-wide view of emerging risks and set prudential requirements that are harmonised as much as possible across deposit-taking, insurance and super,” Mr Laker told a conference at the University of Sydney.

He says APRA’s move to distinguish between conglomerates and single-industry institutions has overcome concerns it would not effectively supervise groups that cross sectors.

Concerns a “mega-regulator” would fail – as suggested after the Wallis recommendations in the 1990s – have proven unfounded, he says.

Co-ordination between APRA and the Reserve Bank was also effective during the financial crisis. “Australia’s experience stands in stark contrast to that of many major economies, where regulatory arrangements were found wanting and are now being overhauled.”