APRA Updates FAQs on Liquidity Risk Management Standards and Guidance
APRA updated the frequently asked questions (FAQs) on the management of liquidity risk by the authorized deposit-taking institutions. The questions provide further information to assist regulated entities in the interpretation of the prudential standard (APS 210), prudential practice guide (APG 210), and the reporting standard (ARS 210.0) on liquidity risk management. These FAQs are published for information purposes only and their content does not constitute legal advice.
The prudential standard APS 210 sets out the APRA requirements for authorized deposit-taking institutions in relation to the management and measurement of liquidity risk. ARS 210 is the reporting standard that sets out requirements for the provision of information to APRA related to the liquidity and funding of an authorized deposit-taking institution; it includes reporting forms and associated instructions and should be read in conjunction with the prudential standard APS 210. APS 210 and ARS 210 apply from January 01, 2018. APG 210, however, is a prudential practice guide that is intended to assist the authorized deposit-taking institutions in complying with the specified requirements and to outline prudent practices in relation to the management and measurement of liquidity risk. The key requirements of APS 210 are that an authorized deposit-taking institution must:
- Have a risk management framework to measure, monitor, and manage liquidity risk that is commensurate with the nature, scale, and complexity of the institution
- Maintain a portfolio of liquid assets sufficient in size and quality to enable the institution to withstand a severe liquidity stress
- Maintain a robust funding structure appropriate for its size, business mix, and complexity
Related Links
Keywords: Asia Pacific, Banking, APS 210, APS 210, ARS 210, FAQ, Liquidity Risk, Reporting, 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.
Karen Moss
Senior practitioner in asset and liability management (ALM) and liquidity risk who assists banking clients in advancing their treasury and balance sheet management objectives
Previous Article
APRA Selects Vizor Software to Develop New Reporting SolutionRelated Articles
BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks
The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.
OSFI Finalizes on Climate Risk Guideline, Issues Other Updates
The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.
BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending
BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.
HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks
The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.
BCBS Report Examines Impact of Basel III Framework for Banks
The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.
PRA Consults on Prudential Rules for "Simpler-Regime" Firms
Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.
DNB Publishes Multiple Reporting Updates for Banks
DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.
NBB Sets Out Climate Risk Expectations, Issues Reporting Updates
The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting
EBA Updates Address Securitization Standards and DGS Guidelines
The European Banking Authority (EBA) published the final draft of the regulatory technical standards that set out conditions for assessment of homogeneity of the underlying exposures in simple, transparent, and standardized (STS) securitizations.
FSB Publishes Letter to G20, Sets Out Work Priorities for 2023
The Financial Stability Board (FSB) published a letter intended for the G20 Finance Ministers and Central Bank Governors, highlighting the work that FSB will take forward under the Indian G20 Presidency in 2023
