Essays on Financial Crises - the Need for Australian Prudential Regulation Framework Case Study

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The paper “ Financial Crises - the Need for Australian Prudential Regulation Framework” is a meaningful example of a case study on finance & accounting. Prudential regulation refers to a financial operational legal framework that has a significant contribution to reducing the financial crises in financial institutions. According to the research studies, there is a lot of evidence showing that the absence of these prudential regulations leads to system instability and bank failures. While establishing perfect, easy, and clearly monitored rules for all the financial transactions, they help the institutions to run effectively and limit the risk occurrence.

One of the downfalls of the financial systems, especially the intermediaries and cooperative societies is a failure to comply with prudential regulations (Blundell, 2007). For instance, some countries have only one universal banking law that encompasses all the laws and regulations. However, most of the other countries have mandated the supervisory institutions to deal with operational issues or make routine decisions.   Australian prudential regulation frameworkThe Australian prudential framework has its roots traced back in 1998 as a result of the financial system inquiry.

The inquiry system recommended the reforms in the financial regulations so as to achieve an effective, flexible, and competitive system (S, 2010). The framework consists of three agencies each with specific roles. These include: Australian Prudential Regulation Authority (APRA)This is one of the integrated prudential regulators which are answerable to financial institutions like banks, credit unions, and building societies. It is also responsible for general insurance, friendly societies, and superannuation. APRA is authorized to develop prudential policies that aid in balancing financial safety, competition, efficiency, and competitive neutrality. APRA help in regulating financial institutions that take deposits under one license and are under one depositor protection (Blundell-Wignall & P, 2010). This type of regulation empowers the APRA to take correct decisions in favor of the depositors.

This includes the power to cancel licenses, make sensible standards or give directions, appoint statutory managers to any authorized deposit-taking institution (ADI).    


Blundell, W. (2007). Dealing with Financial Crisis and thinking about the Exit. OECD Financial Market Trends, 78-91.

Blundell-Wignall, A., & P, E. A. (2010). The Subprime Crisis and Regulatory Reform, Reserve Bank of Australia. Sydney: Cambridge University Press.

Freedman, G. (2009). The Case for Global Fiscal Stimulus. Sydney: Cengage.

Kohn, D. (2009). Monetary Policy in the Financial Crisis. NY: Macmillan.

R, B. (2009). Global Monetary Developments. Tenessee.

S, B. (2010). Australian Corporates’ Sources and Uses of Funds. RBA Bulletin, 1-12.

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