APRA Announces Policy Measures in Response to Impact of COVID-19
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.
Related Links
Keywords: Asia Pacific, Australia, Banking, Insurance, Securities, COVID 19, Reporting, Data Collection, Prudential Standards, APRA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Previous Article
ESRB Updates List of Countercyclical Capital Buffers in March 2020Related Articles
EBA Issues Erratum for Phase 2 Package of Reporting Framework 3.0
EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.
EBA Updates Lists of Entities for Use in Capital Calculations under SA
EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.
MAS Amends Notice on Related Party Transactions of Banks
MAS amended Notice 643A that addresses requirements for banks to prepare statements of exposures and credit facilities to related concerns or parties.
ECB Amends Guideline on Euro Short-Term Rate
ECB has published, in the Official Journal of the European Union, the Guideline 2021/565 on the euro short-term rate (€STR) and this guideline amends the previous ECB Guideline 2019/1265.
EBA Consults on Standards Related to FRTB-SA
EBA launched a consultation on the draft regulatory technical standards on the list of countries with an advanced economy for calculating the equity risk under the alternative standardized approach (FRTB-SA).
PRA Proposes Rules Related to IRB Approach for Credit Risk
PRA is proposing, via CP7/21, the approach to implementing new requirements related to the specification of the nature, severity, and duration of an economic downturn in the internal ratings-based (IRB) approach to credit risk.
BoE Outlines Regulatory Treatment of Recovery Loan Scheme of UK
The UK government launched the Recovery Loan Scheme (RLS) as part of its continued COVID-19 support for UK businesses, as announced by HM Treasury on March 03, 2021.
FSB Addresses G20 on COVID Measures, TBTF Reforms, and Climate Risks
FSB published a letter, from its Chair Randal K. Quarles, to the G20 Finance Ministers and Central Bank Governors, ahead of their virtual meeting on April 07, 2021.
OSFI Unwinds Temporary Increase to Covered Bond Limit for Banks
OSFI issued a letter to the deposit-taking institutions issuing covered bonds and announced the unwinding of the temporary increase to the covered bond limit for deposit-taking institutions, effective immediately.
EU Amends CRR and Securitization Regulation in Response to Pandemic
To support recovery from the COVID-19 crisis, EU has published two regulations to amend the securitization framework, as set out in the Securitization Regulation (2017/2402) and the Capital Requirements Regulation or CRR (575/2013).
