While we welcome the final report of the Financial Systems Inquiry and its recommendations, we are concerned that there is a risk of fragmentation or cherry picking if some elements are addressed and not others.

The Panel has looked at the interdependent elements of the system and taken a holistic view of what it believes needs to be done to ensure all parts are operating efficiently, with resilience and fairly. But the financial system is like a machine. You can’t change one part without affecting the functioning of another.

Unlike previous reviews, we're not looking at fundamental structural change in the Murray Report. It's more about resetting than rebuilding. In taking a holistic view, the report is more outcomes focused. The Panel has posed the question for each part of the sector: What should this look like now and in the future and how do we get there?

However, the recommendations are not meant to be judged or adopted on their own. There is an interdependency in the system, which means that, for example, increasing the resilience of banks by increasing capital requirements will not succeed if other parts of the system are not also made more resilient.

For example, in superannuation, the Inquiry proposes to ban all borrowing, including limited recourse borrowing, to promote resilience of the superannuation sector, which in turn enhances the resilience of the banking sector and the economy as a whole.

But while many reforms are able to be implemented by Government, others require action by regulators or industry participants. With the proposed changes to capital requirements for banks and other ADIs, for example, Murray has made the point this is not something for Government but rather a matter for prudential settings – which is APRA's responsibility.

The risk is therefore that there is no one person or body responsible for seeing the recommendations are implemented. Clearly Government has a strong interest, but it may be appropriate to task someone with coordinating and overseeing overall implementation.