APRA’s decision to abolish bank hybrids defies logic and is an attack on Australian retail investors and the franking credit system. The decision comes months out from what is expected to be a highly contested federal election.

Unfortunately, retirees and those with self-managed superannuation funds will pay the greatest price. In the name of protecting investors from a potential failure of Australian banks’ capital structure, APRA may well be pushing investors up the risk curve.