Featured Product

    APRA Consults on Reporting Standard for Credit Risk Management

    October 28, 2020

    APRA is consulting on the reporting standard for credit risk management (ARS 220.0). APRA is seeking feedback on the design of the proposed credit risk data collection, including items that authorized deposit-taking institutions consider to be challenging to report or would require additional time to implement. APRA is consulting on the instructions included in the draft reporting standard, the proposed implementation timeline, and appropriate entity-level aggregates from ARS 220.0 data, which could be declared non-confidential. APRA also seeks feedback on the feasibility of authorized deposit-taking institutions reporting a pro-rata allocation to individual financial instruments of provisions that have been raised on a portfolio basis. The feedback period ends on January 28, 2021 while the proposed standard is expected to commence on January 01, 2022.

    APRA intends to remove a number of items from the current reporting forms, including detail on interest income and certain breakdowns of impaired and past due items. APRA proposes to remove the requirement for authorized deposit-taking institutions to categorize their prescribed provisioning exposures into separate time buckets. APRA acknowledges that collecting provisions allocated on a portfolio basis at a detailed level, as is proposed in the draft reporting standard, introduces complexity into the collection. Accordingly, APRA is seeking industry feedback on ways that provisions could be reported at a financial instrument level, for example, on a pro-rata basis.

    APRA is proposing a risk-based approach to reporting based on the complexity of the authorized deposit-taking institution wherein less sophisticated authorized deposit-taking institutions have reduced reporting requirements. The proportionate approach seeks to balance burden with the supervisor requirements. APRA seeks further feedback on potential enhancements to this approach. The data collected by ARS 220.0 will form the basis of an authorized deposit-taking institution financial instrument data model, which will be extended at a future date to include topics such as capital adequacy for credit risk, among other areas of interest. In keeping with the APRA approach to data, the ARS 220.0 data model uses a financial instrument level concept-dimension model. Compared with the existing collection, the draft ARS 220.0 will collect more detailed data on credit exposures and provisions of authorized deposit-taking institutions. 

    APRA proposed to update ARS 220.0 to align it with the final version of prudential standard on credit risk management (APS 220) released in December 2019. To align with the commencement of the new APS 220, APRA proposes the first reporting period for the new data collection to be for quarter ending March 31, 2022. The proposed implementation of ARS 220.0 will coincide with the start of the new data collection solution APRA Connect. APRA intends to consult further on determining ARS 220.0 data to be non-confidential for the purposes of section 56 of the APRA Act at a later date. In the interim, APRA is seeking feedback on how appropriate aggregations could address industry concerns with a view to including them as part of the upcoming consultation. Once finalized, the draft ARS 220.0 is intended to replace the current reporting standards on impaired facilities (ARS 220.0), on prescribed provisioning (ARS 220.3), and on movements in provisions for impairment (ARS 220.5). 

     

    Related Links

    Comment Due Date: January 28, 2021

    Effective Date: January 01, 2022

    Keywords: Asia Pacific, Australia, Banking, Credit Risk, Proportionality, Regulatory Capital, Reporting, ARS 220, APS 220, Basel, APRA

    Featured Experts
    Related Articles
    News

    FDIC Proposes Amendments to Real Estate Lending Standards

    FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.

    June 15, 2021 WebPage Regulatory News
    News

    ISDA Consults on Implementation of Fallbacks for Certain Swap Rates

    ISDA is consulting on the implementation of fallbacks for the sterling LIBOR ICE Swap Rate and for the USD LIBOR ICE Swap Rate.

    June 11, 2021 WebPage Regulatory News
    News

    BIS and BoE Launch Innovation Hub in London

    BIS and BoE launched the BIS Innovation Hub Center in London, which is the fourth new Innovation Hub Centre to be opened in the past two years.

    June 11, 2021 WebPage Regulatory News
    News

    ESRB Recommends Reciprocation of Certain Macroprudential Measures

    ESRB published recommendations on the reciprocation of macro-prudential measures in Belgium, France, Luxembourg, Norway, and Sweden.

    June 11, 2021 WebPage Regulatory News
    News

    US Agencies Set Out Unified Agenda for Planned Regulatory Actions

    SEC announced that the Office of Information and Regulatory Affairs released the Spring 2021 Unified Agenda of Regulatory and Deregulatory Actions.

    June 11, 2021 WebPage Regulatory News
    News

    EC Publishes Regulation on Key Aspects of Implementation of SA-CCR

    EC published the Delegated Regulation 2021/931, which supplements the Capital Requirements Regulation (CRR or Regulation 575/2013) with regard to the regulatory technical standards specifying the method for identifying derivative transactions with one or more than one material risk driver.

    June 10, 2021 WebPage Regulatory News
    News

    BCBS Consults on Prudential Treatment of Cryptoasset Exposures

    BCBS is consulting on preliminary proposals for the prudential treatment of cryptoasset exposures of banks.

    June 10, 2021 WebPage Regulatory News
    News

    EBA Revises List of Validation Rules for Reporting

    EBA issued a revised list of validation rules under the implementing technical standards on supervisory reporting.

    June 10, 2021 WebPage Regulatory News
    News

    Banking Authorities and Private Sector Collaborate on Wholesale CBDC

    BIS Innovation Hub, BDF, and SNB announced that, together with a private-sector consortium led by Accenture, they will conduct an experiment using wholesale central bank digital currency (wCBDC) for cross-border settlement.

    June 10, 2021 WebPage Regulatory News
    News

    ESAs Publish Amended Implementing Standards on Mapping of ECAIs

    ESAs published two amended implementing technical standards on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs).

    June 10, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7093