The Australian Prudential Regulation Authority (APRA) announced that it is not progressing with the consultation on minor revisions to the prudential standard on credit risk management (APS 220). APRA had, in December 2020, consulted on minor revisions to APS 220 to ensure appropriate alignment with government’s proposed reforms to consumer credit laws. As these proposed changes were contingent on the passing of legislation for the government’s proposed consumer credit reforms, APRA is not progressing this consultation at this stage.
In this recent communication, APRA also reiterated that it is consulting on a proposed new Attachment C (titled "Macroprudential policy: credit measures") to APS 220. The consultation on the proposed attachment was launched in November 2021, with the feedback period for it ending on February 28, 2022. The proposed attachment would require institutions to ensure that they have the ability to limit growth in particular forms of lending; to moderate higher risk lending during periods of heightened systemic risk or meet particular lending standards, at levels determined by APRA; and to ensure there would be adequate reporting in place to monitor against limits. APRA expects to finalize its response to this consultation in the first half of 2022 and the new attachment is expected to come into effect shortly thereafter. Consistent with the prior communications, the authorized deposit-taking institutions will be required to meet requirements of APS 220 from January 01, 2022. The final standard was released by APRA in December 2019 and is available on the Federal Register of Legislation.
Keywords: Asia Pacific, Australia, Banking, Credit Risk, APS 220, Macro-prudential Policy, Consumer Credit Law, Lending, Reporting, Systemic Risk, APRA
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
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