APRA Revises the Large Exposures Framework for Depository Institutions
APRA released a response paper setting out revisions to the prudential framework for large exposures of authorized deposit-taking institutions. APRA will require authorized deposit-taking institutions to implement most aspects of the revised Prudential Standard APS 221 Large Exposures (APS 221) by January 01, 2019. A transition period will be provided for provisions related to groups of connected counterparties and structured vehicles, allowing authorized deposit-taking institutions full implementation of the large exposures framework by no later than January 01, 2020.
The large exposures framework of APRA aims to limit the impact of losses when a large counterparty defaults and to restrict the potential for problems in one entity from spreading across the financial system. The core components of the new large exposures framework are:
- Reference to tier 1 capital as a basis for determining large exposures
- Recalibration of existing large exposure limits and the introduction of a lower limit on domestic systemically important bank (D-SIB) to D-SIB exposures
- Stronger set of requirements for measuring exposure values and for assessing groups of connected counterparties
Related Links
- Prudential Standard APS 221 Large Exposures (PDF)
- ARS 221 Forms and Instructions (PDF)
- Response Paper (PDF)
- April 2017 Consultation and Responses
Effective Date: January 01, 2020
Keywords: Asia Pacific, Australia, Banking, Large Exposures, APS221, ARS221, APRA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Dieter Van der Stock
IFRS subject matter expert; accounting authority; risk management specialist
Jing Zhang
Quantitative researcher; credit risk modeling and analysis expert; in-demand industry speaker; published author and CCAR authority
Related Articles
|
News
APRA Publishes Proposal to Increase Transparency of Banking DataAPRA proposed to substantially increase the volume and breadth of data it makes publicly available on authorized deposit-taking institutions, including banks, credit unions, and building societies.
December 05, 2019
WebPage
Regulatory News
|
|
News
ESMA Consults on Guide to Internal Controls for Credit Rating AgenciesESMA launched a consultation on the guidelines on internal controls for credit rating agencies (CRAs).
December 05, 2019
WebPage
Regulatory News
|
|
News
EU Finalizes Directive and Prudential Rules for Investment FirmsEU published, in the Official Journal of the European Union, the Directive (2019/2034) and Regulation (2019/2033) on the prudential requirements and supervision of investment firms.
December 05, 2019
WebPage
Regulatory News
|
|
News
OSFI Revises Guideline on Principles for Management of Liquidity RiskOSFI finalized Guideline B-6 on the principles for the management of liquidity risk.
December 05, 2019
WebPage
Regulatory News
|
|
News
PRA Consults on Framework to Manage Outsourcing and Third-Party RiskPRA published a consultation paper CP30/19 that sets out proposals to modernize the regulatory framework on outsourcing and third-party risk management.
December 05, 2019
WebPage
Regulatory News
|
|
News
BoE, PRA, and FCA Consult to Strengthen Operational ResilienceBoE, PRA, and FCA published a shared policy summary and coordinated consultation papers on new requirements to strengthen operational resilience in the financial services sector.
December 05, 2019
WebPage
Regulatory News
|
|
News
EC Amends Rule on Mapping of External Credit Assessment InstitutionsEC published the implementing regulation (EU) 2019/2028, which amends Regulation 2016/1799, regarding the mapping tables specifying correspondence between the credit risk assessments of external credit assessment institutions (ECAIs) and the credit quality steps set out in the Capital Requirements Regulation.
December 04, 2019
WebPage
Regulatory News
|
|
News
EBA Issues Second Part of Advice on Implementation of Basel III in EUEBA published the second part of its advice on the implementation of Basel III in EU, which complements the report published on August 05, 2019.
December 04, 2019
WebPage
Regulatory News
|
|
News
EU Approves European Council Proposal on CCP Recovery and ResolutionEU ambassadors approved the position of European Council on a proposed framework for clearing houses and their authorities to prepare for and deal with financial difficulties.
December 04, 2019
WebPage
Regulatory News
|
|
News
OSFI Releases Guideline on Foreign Bank Branch Deposit RequirementsOSFI released the final version of Guideline A-10 on foreign bank branch deposit requirements, along with guideline impact analysis statement.
December 04, 2019
WebPage
Regulatory News
|
