The Australian Prudential Regulation Authority says it is prepared to take its medicine, accepting all 19 recommendations of the Capability Review directed at it.The regulator says it can make some of the changes itself but it will need government support in the form of funding and legislative change to implement others.In a media briefing yesterday, APRA chair Wayne Byres said: "The capability review emphasises that APRA is, notwithstanding recent budget increases, still a pretty lean regulator in terms of resourcing."APRA was equivocal in its response to the recommendation that the government give it power to veto the appointment or reappointment of directors and senior executives, noting "the potential for moral hazard and administrative burden".Byres said that such a veto power would create a "huge bureaucratic machine", requiring approval of multiple people every day.APRA argues that many elements of its 2018-22 corporate plan are consistent with the findings of the review - a position the review panel agrees with.The review says APRA should retain its focus on maintaining financial safety and stability but focus more on governance, culture and accountability in the financial sector. It says risks in these areas feed into financial safety and stability.The review criticises APRA for not being prepared to operate "beyond quantifiable financial risks".It also criticises the regulator for preferring to operate behind closed doors. "The panel believes this limits its impact and authority," the review says."APRA needs to shift the dial towards a more strategic and forceful use of communication to ensure that it maximises its impact with regulated entities. Some things need to be kept confidential but APRA should consider what is appropriate to be communicated to the public."APRA says it will build on its existing leadership, people and culture strategic initiatives to address the review's recommendation that it enhance its leadership and address variation in leadership capability.It agrees with the recommendation that supervision divisions should be restructured along industry lines - banking, insurance and superannuation. The review has recommended the formation of a new superannuation division.It agrees with the recommendation that the APRA chair should give up his ADI-specific oversight role and adopt a broader organization-wide role.It says that to maintain its core capabilities in financial safety and stability, while also expanding its organisational capability across the areas identified in the review, will require additional resources.It says it will also need additional resources to meet the review recommendation that it increase its risk capacity.It says work is already underway to strengthen external engagement and communication, and this strategic initiative will be broadened.