“The Financial Services Royal Commission has shone a welcome light on the financial services sector and its regulators,” Ai Group Chief Executive, Innes Willox, said today.
“We hope and indeed expect that it will recommend firm and proportionate action in a range of areas where wrongful conduct has been revealed and where regulatory practices have been found wanting.
“We also hope the Royal Commission will recognise the strengths and importance of the financial services sector and the risk that excessive regulatory measures will put further pressures on the availability of credit – particularly for smaller businesses.
“We strongly encourage all political parties to develop responses to the Royal Commission’s report that are effective in improving the integrity of the sector and restoring community confidence in the sector and in its regulation.
“At the same time, it is critical there are no misguided responses which unduly detract from the risk appetite of our major lending institutions.
“We are already seeing unwelcome signs of credit tightening in the period of uncertainty ahead of the release of the Royal Commission’s report. For instance, in Ai Group’s latest Australian PMI®, a number of machinery and equipment makers noted difficulties among business customers in obtaining finance for new machinery and equipment.
“In this pre-election climate we caution all political parties to avoid the temptation to appeal to populist sentiment in responding to the report rather than focusing on measured actions to improve the effectiveness and integrity of the sector and its regulation,” Mr Willox said.