Stephen Jones at the Quality of Advice Roadshow in Sydney last Monday.

Australia is unlikely to feel the hit of the overseas banking crisis thanks to holding strong on stricter prudential standards, according to Minister for Financial Services Stephen Jones.

Speaking in Melbourne on the last leg of the Quality of Advice Review roadshow hosted by Conexus Financial in partnership with Allianz Retire+, the Minister spoke about the potential impact the collapse of Silicon Valley Bank could have on the Australian market.

It was a brief interlude during the discussions on the QAR, where Jones praised the stricter prudential regulations that were in place.

“Nobody complains about conservative, strict prudential regulation in the middle of a financial crisis. Nobody,” Jones said.

He added that are plenty of people in the lead up to a crisis that will argue the rules are too strict and holding back innovation, and these views should be ignored.

“In the US what you see is the consequence of not holding strong on those issues,” Jones said.

Jones said any saver with money in any banks want to know they’re well-regulated and he thanked the Australian prudential regulators for keeping the industry in a strong position.

“That doesn’t mean that we are immune from the economic impact and fallout for what’s going on in other countries,” Jones said.

“We’re obviously concerned about what is going on in our major trading partners and important economies around the world, but in terms of our own banking system, it’s strong from a capital point of view and well regulated. That’s not where our concerns are, and we can all be grateful for that.”

As reported by Professional Planner sister publication Investment Magazine, APRA has required super funds to report any exposure to SVB.

Deep fall in the Valley

Silicon Valley Bank was put into receivership by the Federal Deposit Insurance Corporation after a run on the bank’s deposits.

The run created a negative cash balance for the bank after it had to sell for a loss fixed interest securities which it bought during the Covid-19 pandemic, when interest rates were lower.

The bank’s parent company, SVB Financial Group, was taken over by Californian regulators and has since filed for Chapter 11 bankruptcy.