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 Articles
News

EBA Single Rulebook Q&A: Fourth Update for March 2019

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

March 22, 2019 WebPage Regulatory News
News

ECB Updates Validation Checks and List of Identifiers Under AnaCredit

ECB updated the AnaCredit validation checks (Version 1.4) and the list of national identifiers (version 2.4) for AnaCredit reporting.

March 21, 2019 WebPage Regulatory News
News

BCBS Publishes Results of the Basel III Monitoring Exercise

BCBS published results of the Basel III monitoring exercise based on data as of June 30, 2018.

March 20, 2019 WebPage Regulatory News
News

EBA, FCA, and PRA Agree on MoU Template for Supervisory Cooperation

EBA, FCA, and PRA announced that they have agreed on a template for the Memorandum of Understanding (MoU) that sets out the expectations for supervisory cooperation and information-sharing arrangements between UK and EU/European Economic Area national authorities.

March 20, 2019 WebPage Regulatory News
News

HKMA Publishes CoP on Loss-Absorbing Capacity Requirements of Banks

HKMA issued, in relation to the Financial Institutions Resolution (Loss-Absorbing Capacity Requirements—Banking Sector) Rules (LAC Rules) a chapter of a code of practice (LAC CoP) under section 196 of the Financial Institutions Resolution Ordinance (FIRO).

March 20, 2019 WebPage Regulatory News
News

EBA Publishes Reports Monitoring the Implementation of Basel III in EU

EBA published two reports measuring the impact of implementing the final Basel III reforms and monitoring the implementation of liquidity measures in EU.

March 20, 2019 WebPage Regulatory News
News

BCBS Publishes Results of Survey on Proportionality in Bank Regulation

BCBS published a report presenting the results of a survey conducted on proportionality practices in bank regulation and supervision.

March 19, 2019 WebPage Regulatory News
News

US Agencies Adopt Interim Rule to Facilitate Transfers of Legacy Swaps

US Agencies (FCA, FDIC, FED, FHFA, and OCC) are adopting and inviting comments on an interim final rule.

March 19, 2019 WebPage Regulatory News
News

EBA Updates List of Other Systemically Important Institutions in EU

EBA updated the 2018 list of other systemically important institutions (O-SIIs) in EU. The list also reflects the additional capital buffers that the relevant authorities have set for the identified O-SIIs.

March 19, 2019 WebPage Regulatory News
News

HKMA Expects Banks to Manage Risks Related to Crypto-Asset Exposures

HKMA issued a statement announcing that it expects authorized institutions to take note of the BCBS statement on crypto-assets and its prudential expectations.

March 18, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2780