APRA FAQs Clarify Regulatory Capital Approach for Loan Deferrals
APRA published a set of frequently asked questions (FAQs) to provide authorized deposit-taking institutions with an up-to-date guidance on supervisory expectations during the period of disruption driven by COVID-19. The FAQs clarify the regulatory capital approach for loan repayment deferrals and the guidance for serviceability assessments in the Prudential Practice Guide APG 223 on residential mortgage lending. The FAQs are expected to be updated periodically over the coming months.
The FAQs set out that the regulatory capital approach of APRA specifies that, over the next six months, banks do not need to treat the period of the repayment deferral as a period of arrears for capital purposes. As per APRA, the regulatory capital approach can be applied to a broad class of otherwise performing loans on which authorized deposit-taking institutions grant repayments deferrals. This includes loans that are less than 90 days past due and not impaired at the time deferral was granted. Authorized deposit-taking institutions should publicly disclose the nature and terms of any repayment deferrals given to a broad class of loans and the volume of loans to which they are applied. These institutions should also closely monitor the portfolio credit risk of this cohort of loans, and are required to report to APRA information on the volume and risk profile of this segment of the portfolio.
Related Links
Keywords: Asia Pacific, Australia, Banking, Residential Mortgage Lending, Credit Risk, COVID-19, FAQ, Regulatory Capital, Loan Moratorium, Basel, APRA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
ECB Amends Rule on Reporting of Supervisory Financial InformationRelated Articles
UK Government to Set Out Rules on Wind-down of Critical Benchmarks
HM Treasury notified that, after considering all responses, the government intends to bring forward further legislation, when the Parliamentary time allows, to address issues identified in the consultation on supporting the wind-down of critical benchmarks.
EIOPA Launches Stress Test for Insurance Sector in EU
EIOPA launched the 2021 stress test for the insurance sector in EU.
UK Authorities Publish Third Edition of Regulatory Initiatives Grid
UK authorities jointly published the third edition of Regulatory Initiatives Grid setting out the planned regulatory initiatives for the next 24 months.
EC Consults on Regulation on Non-Financial Sustainability Disclosures
EC is requesting feedback on the proposed Commission Delegated Regulation on the content, methodology, and presentation of information that large financial and non-financial undertakings should disclose about their environmentally sustainable economic activities under the Taxonomy Regulation.
OSFI Outlines Prudential Policy Priorities for Coming Months
OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.
BIS Announces TechSprint on Innovative Green Finance Solutions
Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.
ACPR Publishes Version 1.0.0 of RUBA Taxonomy
ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.
EBA Proposed Regulatory Standards for Central Database on AML/CFT
EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.
ECB Responds to EC Consultation on Crisis Management Framework
ECB published its response to the targeted EC consultation on the review of the bank crisis management and deposit insurance framework in EU.
BCBS, CPMI, and IOSCO to Survey Market Participants on Margin Calls
BCBS, CPMI, and IOSCO (the Committees) are inviting entities that participate in market infrastructures and securities markets through an intermediary as well as non-bank intermediaries to complete voluntary surveys on the use of margin calls.
