APRA Announces Its Policy Priorities for 2019
APRA announced the annual policy priorities for 2019, outlining the areas of intended policy focus in the banking, insurance, and superannuation sectors. The near-term policy agenda will be shaped by APRA response to the Royal Commission into misconduct in the banking, superannuation, and financial services industry. The policy agenda also takes into account major developments such as the new Banking Executive Accountability Regime (BEAR) and other important industry trends.
In the banking sector, APRA will progress its proposals to implement the Basel III capital reforms and give effect to its expectations for the "unquestionably strong" capital ratios for authorized deposit-taking institutions, to take effect in 2022. As part of the finalization of the Basel III reforms, APRA is considering changes to its overall approach to capital requirements to improve comparability, transparency, and flexibility in areas where the methodology of APRA is more conservative than the minimum international requirements. If APRA proceeds in this direction, the outcome would be significant "presentational" and calculation changes to a number of prudential standards, although these would not affect the quantum of capital required.
APRA expects to consult on draft prudential standards for credit and operational risk (Prudential Standard APS 112 Capital Adequacy: Standardized Approach to Credit Risk and Prudential Standard APS 114 Capital Adequacy: Standardized Approach to Operational Risk) during the first half of 2019. Following this, in late 2019 or early 2020, APRA will consult on revisions to the Prudential Standard APS 113 Capital Adequacy: Internal Ratings-Based Approach to Credit Risk and Prudential Standard APS 117 Capital Adequacy: Interest Rate Risk in the Banking Book. These proposals will also incorporate any changes to the presentation of capital requirements that APRA is considering to improve comparability and transparency. In addition, APRA plans to update the Australian Prudential Standard APS 220 on Credit Risk Management, including recommendations related to valuations, as recommended in the final report of the Royal Commission. However, APRA has not yet determined the timeframe for proceeding with the recently released changes to international standards for market risk and it is unlikely that APRA will choose to be an early adopter of these reforms.
Across general, life, and private health insurance (PHI), APRA intends to consult the industry on plans to apply the capital framework for life and general insurance to PHI, as part of Phase Three of its PHI roadmap. APRA also intends to release a discussion paper examining how the prudential framework for insurance may need to be modified in light of the new AASB 17 accounting standard on insurance contracts. In the area of superannuation, APRA plans to ensure that superannuation trustees are prepared to implement the new member outcome assessments from January 01, 2020 (including any amendments required by legislative changes).
Related Links
Keywords: Asia Pacific, Australia, Banking, Insurance, Superannuation, Basel III, BEAR, Policy Priorities 2019, AASB 17, IFRS 17, APRA
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Dieter Van der Stock
IFRS subject matter expert; LDTI subject matter expert; accounting authority; risk management specialist

Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.
Previous Article
EBA Single Rulebook Q&A: First Update for March 2019Related Articles
HKMA Enhances Loan Guarantee Scheme to Alleviate Pressure on SMEs
HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.
EBA Proposes Standards for Supervisory Cooperation Under IFD
EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.
BoE Sets Out Plan to Transform Data Collection from Financial Sector
BoE has set out a three-phased plan to transform data collection from the UK financial sector over the next decade.
BIS Issues Updates on Technology Initiatives on Cross-Border Payments
BIS recently made a couple of announcements with respect to the planned and ongoing work in the area of financial technology.
ESRB Updates List of Macro-Prudential Measures in February 2021
ESRB updated the list of national macro-prudential measures applied by each member state in the European Economic Area.
BoE Survey Shows Positive COVID Impact on Outsourced Banking Services
BoE has set out results of a survey on the impact of COVID-19 events on the use of machine learning and data science.
ECB Issues Opinion on Proposal to Regulate Crypto-Asset Markets in EU
In response to a request from the European Council and Parliament, ECB published an opinion on the proposed regulation on markets in crypto-assets.
APRA Announces Aggregate Committed Liquidity Facility for Banks
APRA announced the updated aggregate amounts for the 2021 Committed Liquidity Facility (CLF) established between the Reserve Bank of Australia (RBA) and certain locally incorporated authorized deposit-taking institutions that are subject to the Liquidity Coverage Ratio (LCR).
ECB and UK Authorities Agree on Post-Brexit Supervisory Cooperation
ECB published supervisory Memorandums of Understanding (MoUs) with UK as well as other European and non-European authorities.
EIOPA Outlines Strategic Supervisory Priorities for Insurance Sector
EIOPA identified business model sustainability and adequate product design as the two EU-wide strategic supervisory priorities.