APRA Consults on Reporting Standards Under Capital Framework for Banks
The Australian Prudential Regulation Authority (APRA) is seeking comments, until June 07, 2022, on the proposed reporting standards under the updated capital framework for banks.
The APRA consultation includes the interim reporting standards in tandem with the updated capital adequacy and credit risk capital requirements for authorized deposit-taking institutions. APRA published the draft interim reporting standards that will accompany the prudential standards on capital adequacy (APS 110), standardized approach to credit risk (APS 112), and internal ratings-based approach to credit risk (APS 113): ARS 110.0 on capital adequacy, ARS 112.0 on standardized approach to credit risk, and ARS 113.0 on internal ratings-based approach to credit risk. ARS 110.0 maintains the structure of the current reporting form, with updates that align it with the new prudential standards. These updates include more detailed information on subsidiaries and the addition of data items related to leverage ratios of authorized deposit-taking institutions. ARS 112.0 and ARS 113.0 will use a table-based format made possible by the implementation of APRA Connect, moving away from the current form-based collections. The new standards will replace the below reporting standards and their associated reporting forms, effective for the reporting period ending March 31, 2023:
- ARS 112.1 on standardized credit risk—on-balance sheet assets
- ARS 112.2 on standardized credit risk—off-balance sheet exposures
- ARS 113.0 on foundation internal-ratings based approach to credit risk
- ARS 113.1 on advanced internal-ratings based approach to credit risk
- ARS 113.2 on internal ratings-based approach to credit risk—specialized lending supervisory slotting
- ARS 113.3 on internal ratings-based approach to credit risk—retail
- ARS 113.4 on internal ratings-based approach to credit risk—other assets, claims, and exposures
APRA has identified three other reporting standards that require minor updates: ARS 180.0 on counterparty credit risk, ARS 221.0 on large exposures, and ARS 223.0 on residential mortgage lending. No changes are expected to the data submitted under these three reporting standards. APRA intends to use APRA Connect to collect submissions for ARS 110.0, ARS 112.0, ARS 113.0, and ARS 115.0 data. Versions of the draft collections for ARS 110.0, ARS 112.0, and ARS 113.0 will be available in a test environment before the end of this consultation. APRA also clarified expectations for data to be submitted for September 2022 and December 2022 quarter-ends in parallel with the existing reporting. For the September and December submissions, institutions are expected to explain when the submission does not comply with the prudential requirements, such as the use of unapproved models and proxies. APRA is committed to meeting the January 01, 2023 implementation date and proposes for the interim reporting standards and consequential/other updates to be effective for the reporting period ending March 31, 2023.
Related Links
Keywords: Asia Pacific, Australia, Banking, Basel, Regulatory Capital, Credit Risk, Standardized Approach, IRB Approach, ARS 110, ARS 112, ARS 113, Large Exposures, Lending, APRA, Headline
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
OCC Publishes Multiple Updates for Financial Sector EntitiesRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
