Initial Westpac response to final FSI recommendations
7 December 2014
Westpac Group today noted the release of the Financial System Inquiry’s Final Report. The report marks an important step in the process of the review, which was charged to examine how the financial system could be best positioned to meet Australia’s evolving needs and support Australia’s economic growth. The Group will participate in the consultation process with Treasury and the Federal Government on all the recommendations, as well as with APRA on the specific recommendations relating to capital.
Commenting on the Report, Westpac Group Deputy Chief Executive Officer, Phil Coffey, said:
“We agree it is important that the Australian banking sector is strongly capitalised which is why we have prioritised strength over the past several years. We believe we are strongly capitalised. As the FSI panel noted, comparing capital levels with global peers is a complex issue and we will be consulting with APRA on defining fact based international capital comparators.
“We are supportive of a continued risk based approach to capital allocation, to enable the greatest ‘allocative efficiency’. It will be important to keep that focus as we work with APRA on adjustments to risk weighting from the Basel review of variability and from FSI recommendations.
“We are encouraged that the FSI and Treasurer have laid out a sensible timetable for the remaining process to be undertaken, as well as appropriate transitioning to avoid any unnecessary negative impacts on growth and returns,” he said.
Westpac will analyse all the recommendations in detail over the coming period and formally respond to the Report by the 31 March 2015 deadline.