In a discussion paper released by The Australian Prudential Regulation Authority (APRA), it has asked for more regulatory control over conglomerates. It is seeking dramatic broadening of its supervisory mandates in order to keep an eye on the doings of the big companies.

The regulator is eyeing for the financial conglomerates, in particular, something which is not yet a part of its work area.

The discussion paper has asked that Level 3 supervisory framework be included in the list where Level 1 and 2 are already existent.

APRA has called Level 3 the regulatory "blind spot." After the financial crisis, says the regulator, a need has arisen to keep a strict watch on the doings of the companies, most importantly the financial ones.

This is important to protect the rights of the creditors. And since, the businesses have developed complex structures and frameworks, standalone views are insufficient. To be able to give a clear picture of the kind of risk that one is involved with, a through study is required.

As part of the Level 3 study, APRA is asking for studying a group's capital adequacy along with governance and risk management requirements.