ASIC is asking for more powers to police banks, and wants to intervene on products it thinks could hurt consumers.
ASIC chairman Peter Kell has said the regulator should be granted powers for proactive "product intervention", Fairfax
According to Fairfax, Kell told a workshop held by the Centre for International Finance and Regulation that the power to intervene in banks' product design and marketing would allow the watchdog to address systemic issues rather than focusing on individual banks and transactions.
"Banning a product would indeed be a rare occurrence, but I would argue it is nonetheless important to have there because as a regulator having a big stick, even if it is rarely or if ever used, is very useful to encourage better market outcomes," Kell said.
Australian Bankers' Association chief executive Steven Munchenberg said lenders were concerned how the power could be used in a practical sense, raising fears it could stifle innovation.
"We would want a lot of close discussions with government about exactly how this is targeted and about where it might be needed so it doesn't stifle innovation and doesn't increase risks for the banks or the regulator," Munchenberg said.