Recent events in Asia have reminded us that good supervision of financial institutions is the single biggest contribution that governments can make to ensure financial stability, whether it is the central bank or another agency that carries out the actual work. While the present system is managerially a different arrangement to the one it replaces, it is not fundamentally different in kind.
There are still very close relations between bank supervision and financial system stability through the close connections between the Reserve Bank and APRA (with the former having two Board positions on the latter). In addition, there is the Council of Financial Regulators, which brings together the heads of the Reserve Bank, APRA and the Australian Securities and Investments Commission (ASIC).