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
Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Previous Article
APRA Further Reduces CLF, Releases Feedback Template for ARS 220Related Articles
BIS Examines Use of Big Data and Machine Learning at Central Banks
BIS published a paper that provides an overview on the use of big data and machine learning in the central bank community.
APRA Finalizes Reporting Standard for Operational Risk Requirements
APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.
ECB Publishes Guide for Determining Penalties for Regulatory Breaches
ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.
MAS Sets Out Good Practices to Manage Operational Risks Amid COVID
MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.
ACPR Announces New Data Collection Application for Banks and Insurers
ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.
BCB Maintains CCyB at 0%, Initiates First Cycle of Regulatory Sandbox
BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.
EIOPA Launches Study on Non-Life Underwriting Risk in Internal Models
EIOPA has launched a European-wide comparative study on non-life underwriting risk in internal models, also kicking-off of the data collection phase.
SRB Publishes Overview of Resolution Tools Available in Banking Union
SRB published an overview of the resolution tools available in the Banking Union and their impact on a bank’s ability to maintain continuity of access to financial market infrastructure services in resolution.
EBA Consults on Pillar 3 Disclosure Standards for ESG Risks Under CRR
EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).
ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting
ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting
