The Council of Financial Regulators (CFR) is the main coordinating body for Australia’s
financial regulators. It comprises the Reserve Bank of Australia (RBA), the Australian Prudential
Regulation Authority (APRA), the Australian Securities and Investments Commission (ASIC) and the
Treasury.
The CFR facilitates cooperation and collaboration across member agencies, with the ultimate aim of
promoting the stability of the Australian financial system and supporting effective and efficient
regulation. In pursuing this aim, the CFR also seeks to support competition in the financial system.
This Charter outlines the objectives, scope and operation of the CFR. CFR agencies also work closely
with each other on a bilateral basis, as set out in the relevant Memoranda of Understanding between
agencies.
Roles and responsibilities
Australia’s financial regulators have complementary and, in some cases, shared mandates and
responsibilities in relation to financial stability. It is therefore important that agencies work
closely with each other to promote financial stability.
The roles of each agency in relation to financial stability are:
The RBA is the central bank, responsible for contributing to the stability of Australia’s
financial system, regulating the payments system, and supervising and resolving clearing and
settlement facilities. It is the ultimate provider of liquidity to the financial system and a key
participant in financial crisis management.
APRA is the prudential regulator, responsible for supervising banks, insurers and superannuation
funds. It is also responsible for macroprudential policy and the resolution of APRA-regulated
entities.
ASIC is responsible for monitoring, regulating and enforcing corporations and financial services law,
and promoting market integrity and consumer protection across the financial services sector. ASIC
regulates and supervises financial markets and regulates clearing and settlement facilities, with its
role being complementary to the supervision of those facilities by the RBA.
Treasury is responsible for advising the Government on financial stability, including on the
financial regulatory framework, policy responses to help alleviate the economic impact of financial
crises, and any necessary Government support in resolutions.
The CFR draws on the expertise of other non-member government agencies where appropriate when
considering financial stability issues and meets jointly with the Australian Competition and Consumer
Commission (ACCC), the Australian Transaction Reports and Analysis Centre (AUSTRAC) and the
Australian Taxation Office (ATO) at least annually to discuss broader financial sector policy.
Collective objectives and scope
The CFR’s collective objective, in promoting financial stability, is to ensure that the
financial system supports the economy by providing the financial services that households and
businesses rely on, including during periods of economic and financial market stress. These financial
services are critical foundations for the economy: they enable households and businesses to save,
borrow, invest, insure, make payments, manage risk and plan for the future.
Financial stability is not simply the absence of instability: it requires a financial system that is
strong, resilient and prepared for adverse conditions. The CFR aims to support financial stability by:
Identifying systemic vulnerabilities in the Australian financial system that may give rise to
financial instability, and coordinating actions by member agencies to mitigate them;
Supporting the coordination of financial regulation, seeking to address any areas of overlap or gaps,
minimise regulatory costs, and promote competition; and
Maintaining crisis management readiness to support a whole-of-system response to instances of
financial instability, as set out in the Memorandum of Understanding on Crisis
Management.
The CFR also provides a forum for coordinating member agencies’ engagement with the work of
international institutions, forums and standard-setting bodies as it relates to financial stability.
The CFR provides collective advice to the Treasurer on matters affecting the Australian financial
system at either the Treasurer’s request or at its own initiative. This advice is based on input
from member agencies and other agencies as appropriate.
Systemic vulnerabilities
The CFR maintains a register of systemic vulnerabilities, which it reviews quarterly and
comprehensively updates at least annually. Systemic vulnerabilities are key characteristics of the
financial system that could give rise to material disruptions or amplify shocks. To support the
identification of vulnerabilities, the CFR scans the horizon for emerging risks and regulatory gaps.
The CFR provides oversight of actions to mitigate systemic vulnerabilities. These actions are taken
forward by individual agencies and coordinated through CFR Working Groups, and form the core of the
CFR’s work program.
Macroprudential policy is an important tool for mitigating certain vulnerabilities at a system level,
moderating excessive risk-taking and reinforcing resilience. APRA is responsible for macroprudential
policy, and consults the CFR prior to making changes to its macroprudential policy settings or
framework. APRA provides an update to the CFR on macroprudential policy on at least an annual basis,
supported by advice from the RBA on financial stability considerations.
Monetary policy can affect, or be affected by, risks to financial stability. The RBA regularly
updates the CFR on financial system risks and vulnerabilities, including (where material) the
potential impact of monetary policy on financial stability (and vice versa).
Regulatory coordination
The CFR is a forum for the regular exchange of information and views on financial regulation, and for
coordination across members when the exercise of regulatory powers by one agency affects others.
The CFR is updated by member agencies on specific regulatory initiatives and actions as relevant, and
through regular consideration of the Regulatory Initiatives Grid (RIG). The RIG provides transparency
on the regulatory landscape and supports the CFR in identifying common challenges and areas of
overlap, and in seeking to minimise regulatory cost and impost.
The CFR seeks to identify regulatory gaps at a ‘whole of system’ level, and seeks to reduce
any risks posed by such gaps. The CFR conducts an annual assessment of the systemic risk from
non-bank financial intermediation in Australia.
In promoting financial stability, the CFR also considers how regulation and market trends affect the
competitiveness of specific sectors. The CFR works closely with the ACCC in considering competition
issues, including on reviews relating to competition in the financial system, and actively consults
the ACCC on relevant CFR initiatives.
The CFR may recommend to Government that member agencies are granted additional powers, where it
considers these would be necessary to support financial stability.
Crisis management
The CFR has set out its approach to crisis management in the attached Memorandum of
Understanding on Crisis Management. The CFR’s guiding principle is that private
sector or market-based solutions are generally the preferred means of crisis management, but that
there may be circumstances where a public sector response is required.
The CFR oversees a range of crisis simulation exercises, which are conducted on a regular cycle to
test the readiness of key crisis management tools and response protocols. Lessons learned from these
exercises are used to inform the CFR work program.
Operations
The CFR is a non-statutory body and has no legal functions or powers separate from those of its
individual member agencies. It is a forum for cooperation, underpinned by the commitment of its
member agencies to be open, proactive and collaborative. The CFR meets at least four times a year,
and operates through a range of sub-groups through the year.
The CFR comprises two representatives from each agency: the agency head and another senior
representative (nominated by the agency head). The Governor of the RBA chairs the CFR, and the RBA
provides the CFR Secretariat. Other representatives of member and non-member agencies may attend
meetings as relevant. The Treasurer may also meet with the CFR from time to time.
Following each CFR meeting, a statement is published to provide transparency on the discussion and
any actions arising from it. The CFR may also publish other statements, reports and papers as
appropriate.
The CFR work program is taken forward by a number of inter-agency Working Groups and Forums, which
are established and dissolved in line with CFR priorities. CFR Working Groups report to the CFR at
least annually with an update on progress and a plan for the period ahead. CFR Forums are for
information sharing across member agencies on key issues.
The Deputy Chairs (or equivalent) of each CFR agency also meet frequently to engage on financial
stability issues, as well as to oversee and provide direction to the CFR Working Groups.
The Charter is facilitative and is not intended to create legally enforceable rights or obligations
or to affect the responsibilities of member agencies. The Charter was approved by the CFR on 24
July 2025 and replaces the previous Charter adopted on 5 July 2019. It may be amended at any
time by agreement among member agencies. It will be reviewed on a three-year basis, with the next
review to be completed by 24 July 2028.
