The banking watchdog has received some stick over the way it has gone about handling the banks but it is quick to remind Australians the stability of the nation's financial system "does not happen by itself".
In its 2018/19 annual report, the chairman of the Australian Prudential Regulation Authority Wayne Byres says as Australia enjoys a long period of sound financial health, this "should not be taken for granted".
"Throughout the year, APRA has taken every opportunity to emphasise that the Australian financial system's stability and safety does not happen by itself, and is only achieved by continued vigilance and through effective prudential supervision and system oversight," Mr Byres says in the report.
"Maintaining a stable financial system characterised by confidence in the strength and resilience of financial institutions is critical to supporting and promoting economic growth and development in Australia."
He warned there is a range of vulnerabilities, both domestically and internationally, facing the economy.
These include the impact of very low interest rates, high asset prices, trade tensions, slowing growth rates and high debt levels.
"These are compounded by the accelerating industry risks posed by, for example, potential cyber attacks and technological disruptions," he says.
Community trust in the fairness of financial institutions has also been eroded due to a number of high profile incidents and public inquiries, which have revealed behaviours within institutions that led to very poor consumer outcomes.
Mr Byres said while APRA's primary role is to maintain and protect the stability and soundness of the financial system, it has also been delving more deeply into the culture, remuneration and governance of financial institutions.
As at June 30, the regulator supervised a wide range of institutions across banking, insurance and superannuation, protecting about $6.8 trillion in assets for bank depositors, superannuation members and insurance policyholders.
Australian Associated Press
