ASIC needs more money to police wrongdoing: IMF

by Mackenzie McCarty26 Nov 2012

ASIC needs more funding, according to an International Monetary Fund assessment of the Australian financial system.

The Australia: Financial System Stability Assessment, 2012, praises the regulating agency, saying ASIC has “rightfully earned” its reputation as an effective and credible enforcer of market regulation.

It then went on to recommend that “ensuring sufficiency and stability of ASIC core funding,” become a “high priority” for the Australian government, saying a lack of budgetary resources means the market regulator is “hampered” in its ability to carry out proactive supervision.

“A significant amount of ASIC’s funding is non-core funding earmarked for specific projects and the share of non-core funding has been increased in the last few years…To supervise a large number of financial services licensees, ASIC uses desk-top, rather than on-site, reviews for initial risk-based assessments, reflecting in part its resource constraints.”

Because of this, the IMF says it’s “important” that the government give ASIC more money and flexibility over its operational budget.

The government has responded by saying the assessment is “fair,” but hasn’t said whether plans to increase ASIC’s budget are in the works.

ASIC's funding increased temporarily after the GFC, from $100 million to $361 million, but has since declined to $353 million.