Routine demands from the Government for the Australian Prudential Regulation Authority to cut costs and maintain work output have "eroded its independence," APRA contended in its submission the Financial System Inquiry."Continued efficiency dividends would require APRA to reduce current levels of supervisory intensity," it said.It might, for example, need to cut back on the frequency or depth of routine activities and thematic risk reviews, recruit less experienced staff or "de-prioritise prudential policy and operational projects."APRA said "these would not be APRA's preferred choices if current levels of safety in the Australian financial system are to be maintained."