General Information & Client Services
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
August 14, 2018

APRA published a discussion paper that outlines the potential approaches to adjust the capital framework for authorized deposit-taking institutions to make capital ratios more transparent, comparable, and flexible. These approaches focus on amending disclosure requirements and the way in which institutions would be required to calculate and report capital ratios, without altering the quantum and risk-sensitivity of capital requirements. Written submissions must be sent by November 02, 2018.

The approaches would not change the amount of capital authorized deposit-taking institutions are required to hold beyond the unquestionably strong capital benchmarks announced in July 2017. Rather, APRA is considering whether to alter the way authorized deposit-taking institutions’ capital requirements are calculated and disclosed to facilitate greater domestic and international comparability and transparency of capital strength. The discussion paper outlines two general approaches designed to aid authorized deposit-taking institutions in representing and communicating their capital strength:

  • Under the first approach, authorized deposit-taking institutions would continue using existing definitions of capital and risk-weighted assets, but APRA would develop a methodology allowing them to improve the credibility and robustness of internationally comparable capital ratio disclosures
  • Under a second approach, APRA would change the way authorized deposit-taking institutions calculate capital ratios to instead use more internationally harmonized definitions of capital and risk-weighted assets. To maintain the strength and risk-sensitivity of the capital framework, there would need to be corresponding increases in minimum ratio and/or capital buffer requirements.

The discussion paper also proposes measures to make the capital framework more flexible in times of stress, including by increasing the size of regulatory capital buffers relative to minimum regulatory capital requirements. APRA is open to considering these approaches independently or in combination, or indeed retaining its current methodology, and is seeking industry feedback on whether the benefits of the suggested approaches outweigh the regulatory burden and associated increase in complexity. APRA intends to consult on draft revised prudential standards incorporating the outcome of this consultation in 2019. APRA expects that final prudential standards would be released by mid-2020. In finalizing the revised capital framework, APRA will have regard to the Basel III implementation timetable. However, as indicated in the February 2018 Discussion Paper, it is likely that the revised prudential requirements would commence from January 01, 2021


Related Links

Comment Due Date: November 02, 2018

Keywords: Asia Pacific, Banking, Capital Framework, Basel III, Regulatory Capital, Disclosures, APRA

Related Insights

US Agencies Propose Rule on Appraisals for Real Estate Transactions

US Agencies (FDIC, FED, and OCC) proposed a rule to increase the threshold level at or below which appraisals would not be required for the residential real estate transactions from USD 250,000 to USD 400,000. Comments will be accepted for 60 days from publication in the Federal Register.

December 07, 2018 WebPage Regulatory News

EBA Single Rulebook Q&A: First Update for December 2018

This week one answer was published as part of the Single Rulebook Questions and Answers (Q&A).

December 07, 2018 WebPage Regulatory News

FED Updates Reporting Form and Instructions for FR Y-14Q

FED published the updated reporting form FR Y-14Q for Capital Assessment and Stress Testing, along with the associated instructions.

December 06, 2018 WebPage Regulatory News

PRA Finalizes Policy on Minor Amendments to Regulatory Reporting

PRA published the policy statement PS30/18, which contains the final policy following a consultation (CP16/18) on certain amendments to regulatory reporting.

December 05, 2018 WebPage Regulatory News

GM of BIS Examines Regulatory Implications of Big Tech in Finance

Agustín Carstens, the General Manager (GM) of BIS, during the keynote address at the FT Banking Summit in London, spoke about new challenges and policy implications of big tech in finance.

December 05, 2018 WebPage Regulatory News

ACPR Publishes Version 2.8.1 of the CRD IV Taxonomy

ACPR notified that version 2.8.1 of the Capital Requirements Directive (CRD) IV Data Point Model taxonomy and version 2.1.0 of the Anti-Money Laundering and Terrorist Financing (LCB-FT) taxonomy have been made available.

December 04, 2018 WebPage Regulatory News

European Council Endorses Package on CRD 5, CRR 2, BRRD 2, and SRMR 2

European Council endorsed the agreement achieved between the presidency and the Parliament on the key measures of a comprehensive legislative package aimed at reducing risks in the banking sector in EU.

December 04, 2018 WebPage Regulatory News

BCBS Report Examines Cyber Resilience Practices Across Jurisdictions

BCBS published a report that identifies, describes, and compares the range of observed bank, regulatory, and supervisory cyber-resilience practices across jurisdictions.

December 04, 2018 WebPage Regulatory News

EIOPA Publishes Q&A on Regulations and Guidelines

EIOPA published new sets of questions and answers (Q&A) on guidelines, implementing regulations, and delegated regulations applicable to insurers in Europe.

December 03, 2018 WebPage Regulatory News

ESMA Registers A.M. Best (EU) Rating Services as Credit Rating Agency

ESMA, the direct supervisor of credit rating agencies (CRAs) in EU, has registered A.M. Best (EU) Rating Services B.V. as a CRA under the CRA Regulation, with effect from December 03, 2018.

December 03, 2018 WebPage Regulatory News
RESULTS 1 - 10 OF 2316