Much of the life of the banking industry in Australia is played out in the shadows of the banking royal commission. And it is from some Treasury dudgeon or other that the consultation on the Financial Accountability Regime - a cornerstone recommendation of Kenneth Hayne - reaches view.
This onerous regime will apply to ADIs with more than A$10 billion in assets (around 11, including one mutual, Great Southern Bank) and insurers with assets c.$3 billion.
Banks will be the first industry to be subject to the FAR "as these entities will have existing mechanisms and processes in place from the Banking Executive Accountability Regime that provides a foundation for transition", or so Treasury said on Friday.
For ADIs and their licensed non-operating holding companies (NOHCs), the FAR will apply from the later of 1 July 2022 or 6 months after the commencement of the FAR.
It is intended that the FAR will commence for insurers, their licensed NOHCs and superannuation from the later of 1 July 2023 or 18 months after the commencement of the FAR.
It’s the usual template: an Exposure Draft of the Legislation to enact the FAR regime and powers and responsibilities, plus Exposure Draft Explanatory Materials.
There is also an Information paper on joint administration of the FAR, and a policy paper on a list of prescribed responsibilities and positions.
FAR, the Financial Accountability Regime is BEAR on steroids, or BEAR for directors who won’t like it and don’t like it. And hundreds and thousands more senior and not so senior personnel working all around banking.
In a heading heavy with irony, Treasury catalog "Individual(s) intended to be captured" by the FAR melodrama.
Front and centre: "All members of the Board of the accountable entity."
This elite band may soon increasingly be colluding a round of handsome – massive – increases in directors’ fees.
The time, the pain and the risk in working your life away on the board of a big bank - you might as well be paid half or a quarter what the CEO gets.
Treasury seeks responses to consultation on the FAR up until 13 August 2021, in the middle of profit season.