APRA updated the frequently asked questions (FAQs) on liquidity risk standards for authorized deposit-taking institutions. As part of this update, APRA has published new FAQs on minimum liquidity holdings, mortgage warehouse facilities, and calculation of collateral outflows. The FAQs provide further information to assist regulated entities in the interpretation of the prudential standard APS 210, the prudential practice guide APG 210, and the reporting standard ARS 210.0 on liquidity risk management. APRA also published an information paper setting out its decision on the quarterly assessment of the countercyclical capital buffer (CCyB) for authorized deposit-taking institutions.
APRA confirmed that, for the authorized deposit-taking institutions, a CCyB of 0% remains appropriate, based on an assessment of the systemic risk environment in the country. The CCyB is likely to remain at this level until at least the end of 2021. APRA reviews the buffer quarterly and may adjust it if future circumstances warrant this. CCyB has been set at 0% of the risk-weighted assets since it was introduced in 2016. However, APRA has already flagged its intention to introduce a non-zero default level for the CCyB and has outlined a proposal to do this as part of the consultation on making the capital framework for authorized deposit-taking institutions more risk-sensitive, flexible, and transparent. This set of reforms will not come into effect until the beginning of 2023. APRA expects to commence the next stage of its consultation on the authorized deposit-taking institutions' capital in the first half of next year. The revised capital framework of APRA is currently scheduled to come into effect from January 01, 2022.
Keywords: Asia Pacific, Australia, Banking, CCyB, Regulatory Capital, FAQ, Liquidity Risk, Basel, Systemic Risk, Reporting, APRA
Previous ArticleUS Agencies Propose to Revise and Extend Call Reports for Banks
ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.
EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.
HKMA published the seventh and final issue of the Regtech Watch series, which outlines the three-year roadmap of HKMA to integrate supervisory technology, or suptech, into its processes.
EC launched a targeted consultation to improve transparency and efficiency in the secondary markets for nonperforming loans (NPLs).
BIS, Danmarks Nationalbank, Central Bank of Iceland, Norges Bank, and Sveriges Riksbank launched an Innovation Hub in Stockholm, making this the fifth BIS Innovation Hub Center to be opened in the past two years.
FDITECH, the technology lab of FDIC, announced a tech sprint that is designed to explore new technologies and techniques that would help expand the capabilities of community banks to meet the needs of unbanked individuals and households.
EC released the EU Taxonomy Compass, which visually represents the contents of the EU Taxonomy starting with the EU Taxonomy Climate Delegated Act.
FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.
EIOPA published its annual report, which sets out the work done in 2020 and indicates the planned work areas for the coming months.
The ESRB paper that presents an analytical framework that assesses and quantifies the potential impact of a bank failure on the real economy through the lending function.