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    APRA Announces Policy Measures in Response to Impact of COVID-19

    March 23, 2020

    APRA has suspended the majority of planned policy and supervision initiatives in response to the COVID-19 disruption. All substantive public consultations and actions to finalize revisions to the prudential framework that are underway or upcoming, including consultations on prudential and reporting standards, have been suspended. As of now, APRA does not plan to recommence consultation on any non-essential matters before September 30, 2020. APRA is also reconsidering the implementation dates and transition timeframes for prudential and reporting standards that have been recently finalized but not yet implemented. Further details on any adjustments will be provided shortly.

    APRA may continue to progress certain data reporting initiatives where they are critical to meeting its mandate in the current environment, including new data collections related to the impact of COVID-19. Over the period ahead, the primary focus of supervision will be on monitoring the impact of COVID-19 on the financial and operational capacity of regulated institutions. Consequently, the supervisory priorities of APRA, outlined in January 2020, will be largely suspended until at least September 30. The refocused supervision effort will involve frequent communication with entities, monitoring key financial settings, such as capital and liquidity, and responding accordingly. These engagements will be conducted virtually, unless absolutely necessary, and will continue as long as necessary.

    APRA also confirmed its regulatory approach to the COVID-19 support packages being offered by banks and other lenders to their borrowers in the current environment. Many banks have recently announced COVID-19 support packages that provide affected borrowers with an option to defer their repayments for a period of up to six months. These packages have mainly been offered to small business and home loan customers. APRA will be writing to all authorized deposit-taking institutions to advise them of the specific reporting treatment for loans subject to these support arrangements. APRA will require authorized deposit-taking institutions to report to APRA, and publicly disclose, the nature and terms of any repayment deferrals and the volume of loans to which they are applied. Regardless, authorized deposit-taking institutions must continue to provision for these loans under the relevant accounting standards.

     

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    Keywords: Asia Pacific, Australia, Banking, Insurance, Securities, COVID 19, Reporting, Data Collection, Prudential Standards, APRA

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