Australian Securities and Investments Commission (ASIC) Chairman James Shipton is “attuned and very alert” to suggestions the regulator has been too supportive of the companies it oversees.

He says “regulatory capture or favouritism towards regulated entities” has been the subject of commentary in the Hayne royal commission.

“I will do everything in my power to not let this happen,” he told the Senate Economics Legislation Committee last week. “No one is more motivated than I to maintain and enhance the institutional credibility of ASIC.”

Mr Shipton says financial regulators must show absolute strength and robust independence.

“Having worked in a range of other jurisdictions, I know all too well the corrosive effects of the decline of institutional credibility.”

The royal commission’s interim report, which focuses on banking, highlights a lack of meaningful competitive pressure in Australia, and the absence of fear of institutional failure.

Mr Shipton says it is difficult for consumers to exert pressure on large institutions, and that regulators must step up.

“We all have to be very aware that the particular structural characteristics of Australia’s financial system have unintended consequences that require extra effort and attention by financial regulators.”