The Australian Prudential Regulation Authority (APRA) revoked the authorized deposit-taking institution license of Members Equity Bank Limited (ME Bank), as the Bank of Queensland Limited acquired ME Bank in July 2021. APRA also released a cross-industry letter to advise on the purpose and timing of a voluntary climate risk self-assessment survey among medium-to-large regulated entities. Entities that choose to participate in the survey will have six weeks from receiving the questionnaire to provide their responses. Additionally, APRA published a discussion paper on the post-implementation review of the Basel III liquidity reforms. APRA is inviting feedback on the discussion paper by April 14, 2022.
The post-implementation review of liquidity reforms seeks to determine how efficiently and effectively the liquidity coverage ratio (LCR) and net stable funding ratio (NSFR) are achieving their objectives. APRA is seeking feedback from relevant stakeholders on benefits to financial safety and system stability, compliance costs (upfront and ongoing), commercial costs (such as impact on the cost of funding), and impact on competition. APRA intends to release a report on the outcomes of the post-implementation review by mid-2022. The outcomes of the review will be used to inform a broader review of the liquidity requirements and this review is scheduled for 2023. The post-implementation review will inform the scope of a planned review and update of the prudential standard on liquidity (APS 210) in 2023.
Coming back to the letter on climate risk self-assessment survey, APRA mentioned that the voluntary survey will gather insights on how APRA-regulated entities are managing climate-related financial risks, using the November 2021 prudential guide on climate change financial risks (CPG 229) as a benchmark. In addition to providing insights into the management of financial risks arising from climate change, the survey will help incorporate climate-related risks into the supervisory assessments of APRA. It will also improve comparability and benchmarking and practices within and across industry—and potentially internationally. Once the survey closes, APRA will provide participating entities with de-identified peer-comparison results to enable them to understand how their approaches and practices compare to peers as well as publish information on industry-level insights and themes from the results. APRA will also incorporate insights from the survey into its ongoing supervisory approaches to addressing the financial risks of climate change. APRA plans to consider the benefit of repeating the survey as well as the benefit of potentially expanding the survey to all regulated entities, to monitor how industry approaches to managing the financial risks of climate change are evolving over time.
- Press Release on ME Bank
- Press Release on Climate Risk Survey
- Letter on Climate Risk Survey
- Press Release on Liquidity Reforms
- Discussion Paper on Reforms (PDF)
Keywords: Asia Pacific, Australia, Banking, Bank Licenses, Climate Change Risk, ESG, Liquidity Risk, LCR, NSFR, Basel, APS 210, Climate Risk Survey, Liquidity Requirements, ME Bank, CPG 229, APRA
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
Previous ArticleEBA Consults on Certain Standards and Guidelines Under CRR and BRRD
The European Banking Authority (EBA) published its work program for 2023 as well as the technical package for phase 3 of version 3.2 of its reporting framework.
The Board of Governors of the Federal Reserve System (FED) announced a pilot climate scenario analysis exercise for six largest banks in the U.S.
The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.
The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).
The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.
The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."
The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.
The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.
The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).