Q No.
|
Member |
Questions |
Proof Hansard page and Hearing date or Written question |
Response |
| APRA01QON |
Leigh |
Dr LEIGH: Mr Lonsdale, I want to continue on the theme of transparency, which the chair has been focusing on. One of the issues the capability review raised is inaction in superannuation. It gave the example that, until the Hayne royal commission, APRA had only applied to disqualify one person since 2008, had only entered into enforceable undertakings with respect to one matter and had not commenced any court proceeding relating to superannuation in the last 10 years. Are you aware of what those statistics look like now? If you don't have those figures at your fingertips, could you undertake to provide them to the committee? |
Hansard p.6
9 August 2019
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(PDF106KB)
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| APRA02QON |
Leigh |
Dr LEIGH: Can you point me to any research that suggests a positive correlation between fees and returns? |
Hansard p.9
9 August 2019
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(PDF90KB) |
| APRA03QON |
Aly |
Dr ALY: The information I have is that the levies on the smaller banks are rising by around 14 per cent in 2019-20, and for the larger banks, or the major banks, they're dropping by four per cent. Would you say that's accurate? |
Hansard p.13
9 August 2019
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(PDF94KB) |
| APRA04QW |
Leigh |
In an article in the Australian Financial Review on 3 August 2019, Edmund Tadros reported that NAB, unlike other banks, had engaged its auditor to write an independent prudential report for APRA. Does this concern APRA? If so, is it APRA’s view that banks should not be allowed to use their auditor to write reports of this kind in future?
The article also reported that NAB had pressured EY to tone down the language in the report. Does APRA know whether or not this actually occurred? If it did, does APRA believe that it should be banned in future?
|
Written |
(PDF89KB) |
| APRA05QW |
Wilson |
What has been the impact of the Memorandum of Understanding between APRA and ASIC? |
Written |
(PDF83KB) |
| APRA06QW |
Wilson |
Why have the APRA heat maps focused on a funds performance, and not return to members? |
Written |
(PDF80KB) |
| APRA07QW |
Wilson |
Will the heat maps be updated to cover return to members? If not, why not? |
Written |
(PDF73KB) |
| APRA08QW |
Wilson |
Has APRA designed possible mechanisms to cover member returns in the heat maps? If not, why not? |
Written |
(PDF74KB) |
| APRA09QW |
Wilson |
Doesn’t the failure to cover fund performance and not member returns focus the heat map to favour industry funds against retail funds? |
Written |
(PDF74KB) |
| APRA10QW |
Wilson |
Over the past year:
(a) How many bank employees have had investigations opened into their conduct under the BEAR?
(b) How many bank employees have had investigations closed into their conduct under the BEAR?
(c) How many bank employees have had fines issued regarding their conduct under the BEAR?
|
Written |
(PDF83KB) |
| APRA11QW |
Leigh |
Staff:
(a) How many staff have left, or asked to be moved, from the teams working with APRA regulated entities on Royal Commission driven activity relating to cultural reform in the sector?
(b) Since the Royal Commission, have you done a staff survey or evaluation of morale and satisfaction? If not, when will you next do this?
|
Written |
(PDF84KB) |
| APRA12QW |
Leigh |
Enforcement decisions:
(a) What is the intended routine path for an internal enforcement decision recommendation to progress to an actual enforcement? In answering, please refer to the decision points and decision makers that sit along that path.
(b) For each of the months in the last three years, could you indicate the number of enforcement decisions recommended internally, and over the following months the progress or status of those recommendations.
|
Written |
(PDF140KB) |
| APRA13QW |
Leigh |
Incorrect capital calculation by NAB:
Journalist Adele Ferguson gave an account of an NAB ‘error’ from 2018 in her book Banking Bad (p.351):
“One of the leaked documents, prepared in April 2018, revealed that NAB had made an ‘error’ – which it described as an ‘emerging issue’ – with regard to the prudential rules requiring it to report quarterly on how much capital it is holding as a measure of its financial health. The ‘error’, made in March 2018, involved understating its risk-weighted assets by $2.8 billion, which made it look like it was in a stronger capital position than it really was” and that “a ‘significant event review’ was to be held on 26 April and then a fix implemented to correct the results in time for the 31 March 2018 half-year results.”
(a) Is APRA aware of the error? If so, when? If not, why not?
(b) Did the error represent a breach of prudential standards:
(i) APS110 or APS111 relating to capital adequacy and its measurement?
(ii) APS310 relating to audit?
(iii) APS330 relating to public disclosure?
(c) What was the outcome of NAB’s ‘significant event review’?
(d) How was the error resolved and was it disclosed to the market? When? If not, why not?
(e) Have further errors been identified that are pending fixes?
(f) Did APRA previously withdraw NAB’s accreditation for using the Advanced Measurement Approach (AMA) after persistent concerns about miscalculating capital several years ago?
|
Written |
(PDF118KB) |
| APRA14QW |
Leigh |
NAB internal fraud:
(a) Has APRA required NAB to put aside additional operational risk capital after the internal fraud, allegedly perpetrated by NAB’s former chief of staff, exposed a failure of NAB’s three lines of risk management defence in preventing the multi-million-dollar loss?
(b) Is APRA aware whether NAB risk teams were prevented from performing their monitoring and assurance activities across the Office of the CEO because of the influence exerted by NAB’s former chief of staff? If so, when did this come to your attention? Why didn’t APRA’s supervisory activity, including on-site visits, pick it up?
(c) What is APRA’s current assessment of the effectiveness of NAB’s internal controls?
|
Written |
(PDF86KB) |
| APRA15QW |
Leigh |
NAB CPS220 review approach and watering down of findings in report :
Every 3 years APRA requires all banks to organise a review of their risk management framework. The requirement is known as prudential standard CPS220 and it states that the review must be conducted by ‘operationally independent, appropriately trained and competent’ people.
(a) Did APRA ratify NAB’s decision to engage EY to perform the CPS220 review?
(b) How did EY satisfy the ‘operationally independent’ criteria for performing the CPS220 review when they’ve been NAB’s external auditor for the last 13 years and have a deep understanding and knowledge of NAB operations?
(c) Is APRA aware of the close working relationship between NAB and EY when performing the CPS220 review and preparing the report? Did NAB disclose and explain these interactions to APRA?
(d) Has APRA expressed concerns to either NAB or EY about the currency of the CPS220 report after media reports EY had ‘watered down’ its findings? If not, why not?
(e) Does APRA now have concerns about the currency of the CPS220 reviews performed by EY for the other major banks or APRA regulated entities?
|
Written |
(PDF86KB) |
| APRA16QW |
Leigh |
Record of interview with Dr Ken Henry, former NAB Chairman:
An article in The Age and Sydney Morning Herald on 2 August 2019 reported that Dr Henry advised EY in an interview with EY partners on 13 June 2018 that “he is confident that there are products currently being sold now that they will need to remediate in the future”. An example was highlighted of Self-Managed Superannuation Funds (or SMSF’s) borrowing to invest in managed funds.
(a) Did NAB alert APRA there was a problem with these products. If so, on what date?
(b) How is APRA extending its supervision of NAB to address this?
|
Written |
(PDF106KB) |
| APRA17QON |
Wilson |
CHAIR: What would be helpful is if you came back with the names of the organisations/consultants who dealt with these areas, and then go through which areas they looked at and how the methodology and the heat map was influenced ultimately by each of the different arms that APRA engaged with. I am putting that on notice. I fully accept that you take ownership of the heat map, and I'm not suggesting that you wouldn't do anything otherwise. Because of the contestability around it, scrutiny is justified because of the implications it can have across the entire financial services system.
Mr Byres: We will come back to you on that.
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Hansard pp. 14-15
2 December 2019
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(PDF87KB) |
| APRA18QON |
Wilson |
CHAIR: How about I reword the question: can you provide, for the last five years, as part of your supervision inquiry, an investigation on pricing around unlisted assets?
Mr Byres: We can give you a description of what we have done.
CHAIR: Over the past five years?
Mr Byres: Yes.
CHAIR: That would be helpful.
|
Hansard p. 23
2 December 2019
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(PDF155KB) |
| APRA19QON |
Leigh |
Dr LEIGH: We had a conversation last time about APRA's enforcements activity, following the firm words from the royal commission about APRA needing to take a more robust approach on enforcement. You took on notice questions about APRA's enforcement-type activities. What I was really after were some statistics on how APRA's enforcement activity's changed. I draw your attention to ASIC's statement that:
… since February 2018 … ASIC had seen a 24 per cent increase in enforcement investigations, 130 per cent increase in enforcement investigations involving the big six financial firms and a 241 per cent increase in wealth management investigations.
I wonder whether you might either supply to me now or undertake to supply to the committee those same statistics for APRA.
Mr Lonsdale: We are of course very happy to supply any statistics we can. We are happy to take that on notice.
|
Hansard pp. 23-24
2 December 2019
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(PDF117KB) |
| APRA20QON |
Wilson |
CHAIR: How much are you spending on enforcement mechanisms in terms of your overall budget?
Mr Byres: I would have to take that on notice. It obviously varies depending on particular cases, but we could give you some numbers for different periods.
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Hansard p. 26
2 December 2019
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(PDF79KB) |
| APRA21QON |
Leigh |
Dr LEIGH: Could you undertake to provide to the committee the de identified data from the most recent staff survey?
Mr Byres: It would be quite old. I can't give you—
Dr LEIGH: When you say 'quite old'?
Mr Byres: It can't be the capability review one, because it wasn't shared in full with us.
Dr LEIGH: Can you give me the part that was shared?
Ms Rowell: We did a pulse survey—
Mr Byres: It's in the report.
Dr LEIGH: You have nothing more than what's in the report in terms of—
Mr Byres: I'd have to have a look at whether there is one or two other metrics. We will take on board what we have done in the last 12 months and come back to you.
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Hansard p. 28
2 December 2019
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(PDF126KB) |