More banks will face prudential inquiries from a re-energised APRA if the banking regulator takes up one of the main recommendations from the Capability Review into its work.And every regulated entity, every two years, will need to produce a self-assessment along the lines of those recently demanded from 36 financiers, mostly banks.The APRA Capability Review, released yesterday, formed part of the government's response to the Hayne Royal Commission. The review was the work of an expert panel of three members: former ACCC commissioner Graeme Samuel; governance academic Diane Smith-Gander; and Grant Spencer, the former deputy governor of the Reserve Bank of New Zealand.Leaving diplomatic language for another time, the panel (chaired by Samuel) blasted the productivity, focus and effectiveness of APRA.Wayne Byres, APRA's chair, is encouraged (along with the three other APRA members) to take a whole of industry view and drop special responsibility for one industry sector; banking, in Byres case.APRA "should change its existing internal norms that create a low appetite for transparent supervisory challenge and enforcement by departing from its behind closed doors approach with regulated entities," the panel demanded.The panel also called for APRA to "adopt a stronger approach towards recalcitrant institutions … building organisational confidence …. And increasing its risk appetite."Samuel's review panel found the internal culture of the regulator wanting.There is "a tendency towards conformity in APRA," the panel found."In parts of the organisation there appears to be a culture that is challenged by robust debate and internal contestability" while there is "a patronage model of advancement."