ASIC wants power to ban products

by Adam Smith13 Mar 2015
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 has reported.

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.

COMMENTS

  • by AF 13/03/2015 9:31:54 AM

    The scary thing is ASIC doesn't even have a proper handle on bank products. They surely have enough power to prosecute any breaches. This little Hitler approach is becoming too prevalent in Australia lately.

  • by GC 13/03/2015 10:01:05 AM

    This is going too far. ASIC don't lend the money -the banks do and its the banks who take the risk not the consumers. If ASIC want to control the banks, they can fund the money to be lent out. Stay out of it ASIC - you have absolutely no idea. The unintended consequences could be more harmful.

  • by David 13/03/2015 10:02:12 AM

    I agree with AF - let them look after breaches (and there's enough of them it appears) and not TELL LENDERS what products they can / can't have - this is becoming a nanny state - surely there are more important things to spend tax pays money on !