We wrote a while back that the Australian Prudential Regulatory Authority (APRA) had taken its finger OFF the pulse when assessing the risks facing our financial institutions. That was before COVID19. We think our banks are heavily leveraged and have little equity to offset a collapse in the property bubble.
Despite being faced with the prospect of a property meltdown thanks to an employment destroying pandemic, APRA thinks hiring a “Head of Climate Risk” is the way forward.
Why does APRA bother pursuing a field it has no expertise in much less look to create new green tape to extend its oversight?
It is not alone. The Australian Securities & Investments Commission (ASIC) is now seeking more oversight on corporates reporting on climate change.
ASIC’s own study found that fewer and fewer companies were reporting on climate change over the past decade. Shouldn’t we take that as corporates having a better pulse on the impact that climate change will have on their industries than a bunch of bureaucrats wanting to legislate an ideology?
With the COVID19 driven seismic economic shifts to come, it is frightening to see our government departments pursuing irrelevant regulation that companies are even less concerned about.
APRA should be focused on ensuring the coming property market implosion doesn’t cripple our banks. Instead of using the time to fine tune a wide variety of scenarios and stress tests to combat the troubling future, it is only proving it should have power taken away not granted.