asc. apra, on the other hand, has to be created almost from scratch. we should all support a speedy formation to make sure that the intellectual capital presently residing in its constituent parts in sydney, canberra and brisbane is not lost, but is speedily brought together in one institution. it is also important that it have a high degree of budgetary independence so that it can augment its resources from private financial markets and so ensure a high degree of interaction between regulators and practitioners. i know that the government is aware of these needs and is doing its best to bring about an early introduction for apra. i want to finish tonight by assuring everyone that the reserve bank is doing everything it can to assist in the process.

malcolm edey : otc derivatives regulation keynote address by mr malcolm edey, assistant governor ( financial system ) of the reserve bank of australia, to the international swaps and derivatives association ( isda ) conference, sydney, 18 october 2012. * * * i would like to thank mark manning for his assistance in preparing this speech. good morning, and thank you once again for the opportunity to speak to you today. a great deal has happened since i last addressed this gathering a year ago. markets around the world remain under pressure, with the sovereign debt crisis and fears over the future of the euro continuing to weigh on confidence. australia has been somewhat sheltered from these developments. as reported in the bank ’ s recent financial stability review, australian banks ’ asset quality has held firm, their usage of wholesale funding has been wound back, and overall bank funding costs have fallen over the past year. while australia ’ s financial sector and the condition of the real economy remain favourable by international comparison, many of the lessons of the global financial crisis remain as relevant in australia as elsewhere. the australian authorities have continued to be involved in both domestic and international debates over refinements to regulatory settings. the aim of course is to reduce the likelihood of further distress, and to ensure that in the event that problems do emerge the authorities have the appropriate tools to deal with them effectively. over the past year, the agencies that comprise the council of financial regulators have progressed a number of regulatory initiatives, consulting extensively with industry participants on matters such as the implementation of basel iii in australia, enhancements to the resolution regime for banks, and reforms to the regulation of financial market infrastructure. but today i ’ d like to focus again on the area of reform i discussed here a year ago : the regulation of otc derivatives markets. as everyone in this room is aware, at the pittsburgh summit three years ago the g - 20 leaders agreed that, ‘ all standardised otc derivatives contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end - 2012 at the latest. otc derivatives contracts should be reported to trade repositories. non - centrally cleared contracts should be subject to higher capital requirements ’. when i spoke to this group last october, the council of financial regulators was engaged in a consultation on central clearing of otc derivatives. i talked about a number of policy challenges that the council agencies were grappling with, including whether central clearing of australia ’ s most systemic