APRA’s general manager for policy Charles Littrell is known in banking circles as Australia’s prudential regulator’s hard man.
It is Littrell who often takes the ball up to bankers at conferences and in private delivering some home truths about industry practice, the gaps that APRA sees and how they should be plugged.
He is often the bearer of news bankers don’t want to hear and it seems he was at his best last week when he told the House of Representatives Standing Committee on Economics that more capital at banks was not going to constrain the sector.
Appearing before the committee with his new boss Wayne Byers, Littrell took aim at the narrative being pushed by some in banking that more capital would be a constraint on activities.
Hansard reports Littrell said:
We do not accept the idea that more capital is necessarily bad for the banks or for the economy. More dumb capital is bad, but more risk matched capital is often quite healthy.
That is what we are trying to achieve and, for that matter, it is what the banking system is trying to achieve.
“The banks have greatly increased their capital strength in the last eight years – and one could not accuse them of having suffered from that.