The banking sector is fighting back against a push for more regulation, warning customers will have to pay the cost for "obsessive" red tape.
The West Australian can reveal that one of the nation's biggest banks supplies more than 200,000 cells of information a year to regulators, with the biggest growth in bank employees among their compliance and governance divisions.
The supply of information to regulators is on top of near-daily requests from other organisations including the Tax Office which seeks information to match against its own databases.
There are also ad-hoc requests for information from regulators that also take up extended periods of time for banks.
Regulatory requirements have grown sharply since the global financial crisis which was caused, in part, by unregulated banking practices in areas such as America's sub-prime property market.
A new set of regulations is being proposed by the financial regulator APRA for the banking, life insurance and superannuation sectors could also push up costs.
The authority admits in its "strengthening APRA's crisis management powers" that some of its proposals "may impose some compliance costs".
The Australian Bankers' Association's chief executive, Steven Munchenberg, said there was so much regulation and information provided to regulators, it could be overwhelming for those regulators.
The higher costs imposed on banks for the regulation had to be passed on to consumers.
Reserve Bank assistant governor Guy Debelle argued last week that tougher regulations now were necessary to ensure a lack of "self-discipline" during good economic times did not hurt the financial sector.
He said the impact of regulation may not be as big as it appeared, adding there were market forces at work putting pressure on banks.
Regulation in many cases was required to change the behaviour of the banks.
"It is important to remember that the intent of the regulatory reforms is to alter the incentives for financial institutions and thereby bring about changes in behaviour," he said."The prices of various financial products will change from their pre-crisis levels. This is not an 'unintended consequence' - a phrase which personally I think is overused - but a desired outcome."
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