General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
July 19, 2017

APRA announced its assessment on the additional capital required for the Australian banking sector to have capital ratios that are considered “unquestionably strong.” APRA released an Information Paper that outlines its conclusions on the quantum and timing of capital increases that will be required for Australian authorized deposit-taking institutions to achieve unquestionably strong capital ratios. All authorized deposit-taking institutions are expected to meet the new benchmarks by January 01, 2020.

The analysis draws on international comparisons as well as other information that allows capital strength to be viewed from different perspectives. In its assessment, APRA has focused on the appropriate calibration of common equity tier 1 (CET1) capital requirements, recognizing that CET1 is the highest quality capital and, therefore, most likely to engender confidence in an authorized deposit-taking institution’s financial strength. APRA has distinguished between the authorized deposit-taking institutions using the more conservative standardized approach to capital adequacy and the banks that are accredited to use internal models to determine their capital requirements. The four major Australian banks need to have CET1 capital ratios of at least 10.5% to meet the “unquestionably strong” benchmark. APRA will set prudential standards to achieve this outcome by effectively increasing requirements for all internal ratings-based banks by the equivalent of nearly 150 basis points. For other authorized deposit-taking institutions, the effective increase in capital requirements to meet the “unquestionably strong” benchmark will be about 50 basis points.

 

The 2014 Financial System Inquiry (FSI) endorsed the benefits of a strong and well-capitalized banking system and recommended that APRA set capital standards such that capital ratios of authorized deposit-taking institutions are unquestionably strong. The Australian government subsequently endorsed this recommendation.

 

Related Link: Media Release

Keywords: Asia Pacific, Australia, Banking, CET1, Basel III, Internal Ratings Based, Standardized Approach, APRA

Related Insights
News

PRA Delays Final Direction on Reporting of Private Securitizations

PRA and FCA have delayed the issuance of final direction, including the final template, on reporting of private securitizations, from January 15, 2019 to the end of January 2019.

January 15, 2019 WebPage Regulatory News
News

BCBS Finalizes Market Risk Capital Framework and Work Program for 2019

BCBS published the final framework for market risk capital requirements and its work program for 2019. Also published was an explanatory note to provide a non-technical description of the overall market risk framework, the changes that have been incorporated into in this version of the framework and impact of the framework.

January 14, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: First Update for January 2019

EBA published answers to 13 questions under the Single Rulebook question and answer (Q&A) updates for this week.

January 11, 2019 WebPage Regulatory News
News

PRA Proposes to Amend Supervisory Statement on Credit Risk Mitigation

PRA published the consultation paper CP1/19 that is proposing changes to the supervisory statement (SS17/13) on credit risk mitigation.

January 10, 2019 WebPage Regulatory News
News

FASB Issues Q&A on Estimating Credit Loss Reserves

FASB issued a question-and-answer (Q&A) document that addresses particular issues related to the weighted average remaining maturity (WARM) method for estimating the allowance for credit losses.

January 10, 2019 WebPage Regulatory News
News

FED Updates Reporting and Supplemental Instructions for Form FR Y-9C

FED published the updated reporting instructions and supplemental instructions for the FR Y-9C reporting form. The reporting frequency for FR Y-9C is quarterly, as of the last calendar day of the quarter.

January 09, 2019 WebPage Regulatory News
News

PRA Updates Policy on Liquidity Reporting Under FSA047/048 and PRA110

PRA published the policy statement PS1/19 that provides feedback to responses to the consultation paper CP22/18 titled "Liquidity reporting: FSA047 and FSA048" and the proposal in CP16/18, which intended to correct the level of consolidation of the PRA110 reporting requirements.

January 08, 2019 WebPage Regulatory News
News

FED Proposes to Amend Company-Run Stress Testing Requirements

FED proposed to modify company-run stress testing requirements to conform with the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act.

January 08, 2019 WebPage Regulatory News
News

ESMA RTS on Supervisory Cooperation Under Securitization Regulation

ESMA issued the final regulatory technical standards (RTS) for cooperation between competent authorities and ESAs under the Securitization Regulation (2017/2402).

January 08, 2019 WebPage Regulatory News
News

ESAs Publish Joint Report on Regulatory Sandboxes and Innovation Hubs

ESAs published a joint report providing a comparative analysis of the innovation facilitators (that is, regulatory sandboxes and innovation hubs) established to date within the EU.

January 07, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2461