After months of embarrassment for ASIC, Ms Chester appears to have decided that enough is enough. Rather than rise to comments made by Treasurer Josh Frydenberg, in which he implied that the corporate cop was hindering the economic recovery by looking over too many shoulders, Ms Chester more or less agreed with him – and vowed to rein ASIC in.
“At ASIC we recognise that this is a time of a potential ‘new better’ for regulators and for business – where boards step in early and step up decisively to manage both financial and non-financial risk. With that ‘step in and step up’ by business, ASIC can step back. To only intervene when the data (early warning signs) of harm and misconduct require us to do so,” Ms Chester told media.
“We need to support the economy, promote market integrity and efficient and competitive markets. We need to protect consumers – be they individual consumers, be they vulnerable, be they retail investors, be they wholesale investors, be they small business.”
The comments represent a remarkable de-escalation for the regulator, which at the start of this year was on the warpath, armed with new powers and the “why not litigate?” mindset that delivered it few big wins and a resounding defeat in the “wagyu and shiraz” case.
Ms Chester has also sought to distance herself from Mr Shipton, who remains on leave without pay following the revelation that the taxpayer had footed the bill for around $120,000 in tax advice given to him by KPMG, saying that Mr Shipton was “opaque” about the payments and had failed to implement the leadership changes she had recommended as part of her 2015 review of the regulator.
Ms Chester wants the top job, and – despite her occasionally combative public appearances – is reading the room. The regulator has fallen out of favour, while the big banks are enjoying greater public and political approval in the wake of the massive financial support they provided to households and businesses in the depths of the COVID-19 crisis.
Of course, ASIC cannot disappear completely. But the move to scrap responsible lending laws – and have APRA regulate that area instead – has shown that it’s not entirely invulnerable to the treatment that any government department faces when it becomes a black sheep.
Ms Chester is promising a kinder, better regulator for a kinder, better world – in essence signalling that there’s no need for Treasurer Frydenberg to replace an acting chair that’s already doing everything he wants.
