Council of Financial Regulators

The Council of Financial Regulators (CFR) is Australia’s main coordinating body for financial regulators. It is a non-statutory forum whose members are the Reserve Bank of Australia, Australian Prudential Regulation Authority, Australian Securities and Investments Commission and Australian Treasury, and it focuses on financial stability, regulatory coordination and crisis-management readiness.^[1]

Overview

The CFR sits at the centre of Australia’s multi-agency model for financial regulation. It is not itself a legislature, supervisor, enforcement agency or central bank. Instead, it provides a standing forum in which Australia’s main financial regulatory agencies share information, assess financial-system risks, discuss overlapping responsibilities and coordinate policy or operational responses where coordination is needed.^[1]

Its role reflects the structure of Australia’s regulatory system. The RBA has central-bank functions, including monetary policy, payments-system responsibilities and a role in financial stability. APRA is the prudential supervisor for banks, insurers and most of the superannuation system. ASIC is the corporate, markets and financial-services conduct regulator. The Treasury advises the Australian Government on financial stability issues and the legislative and regulatory framework for the financial system.^[2]

The CFR’s coordinating function is important because many financial-sector issues cross institutional boundaries. A bank liquidity problem, for example, may raise questions for APRA as prudential supervisor, the RBA as liquidity provider and financial-stability authority, ASIC if market disclosure or conduct issues are involved, and Treasury if government policy or legislation is affected. The CFR provides a mechanism for agencies to form a shared assessment while leaving formal decision-making powers with the agencies that hold them under law.^[1][3]

Legal status and mandate

The CFR is a non-statutory body. It has no legislative backing and no formal regulatory or policy decision-making powers of its own. Regulatory actions are taken by the member agencies under their own legislation, obligations and institutional mandates. The CFR’s deliberations may inform agency judgments, but they do not replace the legal accountability of each regulator or department.^[1][3]

The Australian Government Directory classifies the CFR as a non-statutory advisory structure and records its creation date as 2 May 1998. The directory describes the CFR as the coordinating body for Australia’s main financial regulatory agencies and notes that it contributes to the efficiency and effectiveness of financial regulation and to the stability of the Australian financial system.^[4]

The CFR’s charter sets out its objectives, scope and operating arrangements. In broad terms, the CFR facilitates cooperation and collaboration among its member agencies to promote financial-system stability and support effective and efficient regulation. It also seeks to support competition in the financial system while identifying and coordinating responses to systemic risks and vulnerabilities.^[1]

Because the CFR is not a statutory regulator, its authority is institutional rather than legal. It derives practical influence from the participation of the heads and senior officials of the agencies that do hold statutory or policy responsibilities. This makes it a coordination mechanism rather than a separate layer of financial regulation.

Members

The CFR has four member agencies: the Reserve Bank of Australia, Australian Prudential Regulation Authority, Australian Securities and Investments Commission and Australian Treasury. The RBA Governor chairs the CFR, and the RBA provides secretariat support.^[1]

Each member brings a distinct function to the council. APRA oversees banks, building societies, credit unions, general and life insurers, friendly societies and most of the superannuation industry. Its responsibilities include prudential supervision of individual institutions and the promotion of financial-system stability.^[2]

ASIC is Australia’s corporate, markets and financial-services regulator. Its responsibilities include maintaining, facilitating and improving the performance of the financial system and entities within it, promoting confident and informed participation by investors and consumers, administering and enforcing relevant law, and maintaining information about companies and other bodies.^[2]

The RBA is Australia’s central bank. Its functions include setting monetary policy, contributing to financial-system stability, maintaining a safe, competitive and efficient payments system, issuing banknotes, providing selected banking services to government and official institutions, and managing Australia’s gold and foreign-exchange reserves.^[2]

Treasury is the Australian Government’s central economic policy department. In the financial-system context, it advises the government on financial stability and on the legislative and regulatory framework underpinning financial-system infrastructure. It also advises on reforms affecting financial-system security, corporate practices, competition, consumer protection and foreign investment.^[2]

Structure and meetings

The CFR comprises two representatives from each member agency: the agency head and another senior representative. The Chair is the Governor of the RBA, and the RBA provides the CFR Secretariat. Other representatives from member agencies may attend meetings where appropriate.[citation needed]

The CFR meets quarterly, or more often if required. At its meetings, member agencies share views and information, discuss regulatory reforms and address issues where responsibilities overlap. They also share assessments of threats to financial stability and coordinate responses where a coordinated approach is needed.[citation needed]

Other regulatory bodies may be invited to participate in discussions relevant to their mandates. The CFR’s published material identifies the Australian Competition and Consumer Commission, Australian Taxation Office and Australian Transaction Reports and Analysis Centre as examples of agencies that have participated in relevant discussions. A separate annual meeting involving CFR members and other regulators with an interest in the financial sector was instigated in 2017.[citation needed]

Between quarterly meetings, working groups progress CFR work on specific topics or policy reforms. These groups may develop papers for discussion and provide working-group-level advice on whether the CFR should support a particular position. The CFR Deputies Steering Committee provides oversight and strategic direction to working groups on CFR priorities.[citation needed]

Working groups may be ongoing or temporary. They typically operate under agreed terms of reference that define scope, objectives and, where appropriate, timelines. They usually include representatives from the four CFR agencies, and non-member agencies may participate where relevant expertise is needed.[citation needed]

Work program

The CFR describes its collective objective in promoting financial stability as ensuring that the financial system supports the economy by providing services that households and businesses rely on, including during periods of economic and financial-market stress. These services include saving, borrowing, investing, insuring, making payments, managing risk and planning for the future.[citation needed]

The CFR’s work program is organised around identifying systemic vulnerabilities, coordinating financial regulation and maintaining crisis-management readiness. It seeks to identify vulnerabilities in the Australian financial system that may produce instability and to coordinate member-agency actions to mitigate them. It also aims to address regulatory overlap or gaps, minimise regulatory costs and promote competition.[citation needed]

The council’s work has covered a wide range of financial-system topics. Its public news archive includes quarterly statements and publications on systemic risks, cyber resilience, climate-change activity, cash distribution, small and medium-sized banks, financial-market infrastructure, over-the-counter derivatives, cash equity clearing and settlement, and leverage and risk in the superannuation system.^[5]

The CFR’s role in these areas is usually coordination, review, consultation or advice rather than direct rule-making. For example, a CFR publication on a regulatory issue may be followed by action from Treasury through legislation or policy, APRA through prudential standards, ASIC through licensing or conduct regulation, or the RBA through payments or market-infrastructure oversight, depending on the matter.

Crisis management and financial stability

Crisis management is one of the CFR’s central functions. The council maintains arrangements for coordination across member agencies in instances of potential or actual financial instability. Its memoranda of understanding cover information sharing, notification of regulatory decisions likely to affect other agencies’ responsibilities, and consultation arrangements in instability events.^[1]

The CFR agreed an updated Memorandum of Understanding on Crisis Management in July 2025. The updated MOU sets out a framework for coordination across agencies to support the Australian financial system in circumstances of potential or actual instability.[citation needed]

The CFR’s role in crisis management is also linked to trans-Tasman banking issues. Australia and New Zealand have close financial linkages, particularly through major banking groups. The CFR therefore places importance on trans-Tasman crisis resolution and planning arrangements, including through the Trans-Tasman Council on Banking Supervision, whose members include the CFR agencies as well as New Zealand financial authorities.^[1][citation needed]

The CFR does not replace agency responsibilities in a crisis. APRA remains responsible for prudential supervision and resolution powers within its mandate; the RBA retains its central-bank and financial-stability functions; ASIC remains responsible for conduct and market integrity within its remit; and Treasury advises the government on policy, fiscal and legislative matters. The CFR provides the forum through which these responsibilities can be coordinated.

Governance and accountability

The CFR’s governance and accountability arrangements reflect its non-statutory status. Since the council has no formal decision-making powers, it is not itself subject to the same formal accountability framework as a statutory regulator. Instead, accountability for regulatory and policy actions rests with the individual member agencies.^[3]

Each member agency is subject to governance and accountability obligations, including the Public Governance, Performance and Accountability Act 2013, and each prepares an annual report for tabling in Parliament. Member agencies also appear before parliamentary committees or hearings and are responsible for explaining the rationale for their own regulatory decisions.^[3]

The CFR nevertheless publishes information about its activities because it considers transparency to be in the public interest. Since 2003, summaries of CFR activities have been included in the RBA’s Financial Stability Review. The CFR produced its own annual reports from 1998 to 2002.^[3][6]

This arrangement creates a distinction between collective discussion and formal accountability. The CFR can facilitate shared analysis and coordinated recommendations, but any binding decision must be made by a member agency or by government through its own authority. This is a defining feature of the council’s institutional design.

History

The CFR emerged after the 1997 Financial System Inquiry, commonly known as the Wallis Inquiry. The Australian Government Directory states that the CFR was established following the inquiry’s recommendation and that its key documents are memoranda of understanding between the agencies.^[4]

The original CFR charter was adopted in 1998. It described the council as a forum for cooperation and collaboration among the main regulators of the Australian financial system: the RBA, APRA and ASIC. The original charter listed functions such as sharing information and views, liaising with other regulators, harmonising regulatory and reporting requirements, identifying important financial-system issues and trends, and coordinating responses to actual or potential financial instability.^[7]

The charter was updated in later years, including in 2004, 2019 and July 2025. The July 2025 update reinforced cooperation arrangements for contributing to financial stability among APRA, ASIC, Treasury and the RBA. It also clarified the outcomes the council seeks to achieve and the roles of member agencies, reflecting developments in the CFR’s operating model.[citation needed]

The CFR’s public profile increased over time. Its dedicated website was launched in February 2013; before that, CFR media releases were hosted on individual agency websites.^[5]

Relationship to Australia’s financial regulatory architecture

The CFR is best understood as a coordination layer within Australia’s financial regulatory architecture. It does not supervise banks, issue market licences, set monetary policy or enact legislation. Those functions sit with its members and, where legislation is required, with Parliament and the government.

Its practical significance lies in connecting the principal public bodies responsible for financial stability, prudential supervision, market integrity, consumer participation, payments, and financial-sector policy. This is particularly relevant for issues that do not fit neatly within a single agency’s remit, such as cyber resilience, financial-market infrastructure, systemic liquidity, climate-related financial risks, and the intersection of bank regulation with competition and consumer outcomes.

For market participants, the CFR is not generally a frontline regulator. Firms are typically regulated directly by APRA, ASIC, the RBA or other agencies depending on their activities. However, CFR work can influence the regulatory environment through recommendations, consultation papers, joint statements, policy coordination and advice to government.

For the public sector, the CFR provides an established process for aligning agency perspectives. Its quarterly meetings, working groups and crisis-management arrangements are designed to reduce coordination failures in ordinary policy development and under stress. This coordination role is the reason the CFR is often referenced in discussions of Australian financial stability even though it has no independent statutory powers.