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Tuesday, 14 October 2008
Page: 8959

Ms JULIE BISHOP (2:30 PM) —My question is to the Treasurer. I refer to the Treasurer’s call for reform to the international financial system. Does the Treasurer believe that changes to the Basel II bank capitalisation standards are required? If so, what would those changes be?

Mr SWAN (Treasurer) —I certainly do, and they are currently being implemented. I do not know what the shadow Treasurer thinks is going on, but the council of economic regulators and APRA have been most emphatic about all of that. There have been very important and worthwhile reforms come through that process. What they basically go to is the capital adequacy requirements in our banking system. That is what they go to, and that has been the source of the problem globally. Thankfully, it has not been a problem here.

It has not been a problem here because, particularly in the past year, APRA has been very effective in going out there and working with each of our deposit-taking institutions to ensure that a number of things happen: basically, that those standards are put in place or are being put in place and also encouraging all of those institutions with some form of exposure to events that are occurring internationally to declare them. That has been happening. APRA has been performing its role well when it comes to the implementation of all of the rules that apply to the Basel process and many other things as well. Everybody in this House can be comforted that that is the case.