APRA Assesses Implementation of BEAR at Three Large Banks
APRA released an information paper detailing the findings from its review of the implementation of the Banking Executive Accountability Regime (BEAR) by three of the largest authorized deposit-taking institutions in Australia. The information paper shares entity-specific observations and examples of better practiced identified in the review as part of the APRA strategy to transform governance, risk culture, remuneration, and accountability (GCRA) across all regulated entities. APRA completed the implementation review of the BEAR at Australia and New Zealand Banking Group Limited (ANZ), the Commonwealth Bank of Australia (CBA), and the National Australia Bank (NAB) in February 2020. Westpac Banking Corporation, however, was not included due to an ongoing investigation into potential breaches of the Banking Act 1959.
As at February 2020, APRA has considered that CBA had the most developed approach to implement the BEAR, but that all of the authorized deposit-taking institutions had further work to achieve clearer and more transparent accountability practices. All of the authorized deposit-taking institutions have taken actions and made commitments to address the feedback received. This includes actions and commitments to increase support for implementation of the BEAR, to enhance the use of scenario testing to clarify roles and responsibilities, and to further integrate their breach and consequence management framework with their remuneration frameworks. APRA will assess the effectiveness of these actions and outcomes and will continue to monitor progress through its ongoing supervisory activities. The BEAR is a key regulatory lever for APRA to drive action from authorized deposit-taking institutions and accountable persons. Overall, the APRA review found that all three of the large authorized deposit-taking institutions had designed adequate frameworks to implement the BEAR and that this has helped to deliver the following:
- Greater clarity and transparency of individual accountabilities at authorized deposit-taking institutions
- Sharpened challenge by boards on actions taken by accountable persons to meet their obligations
- More targeted engagement between APRA and authorized deposit-taking institutions to deliver prudential outcomes
Related Links
Keywords: Asia Pacific, Australia, Banking, BEAR, GCRA, Governance, Operational Risk, Basel, ANZ, NAB, 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
SRB Industry Dialog Covers MREL Policy, Resolution Planning, and SRFRelated Articles
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.
FCA Sets up ESG Committee, Imposes Penalties, and Issues Other Updates
The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.
FSB Reports Assess NBFI Sector and Progress on LIBOR Transition
The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.
