APRA Publishes Annual Report Assessing Its Performance as A Regulator
APRA released its 2018-19 self-assessment report, which contains the assessment of APRA against the six key performance indicators set out within the Regulatory Performance Framework of the government. Although APRA considers that it has met all six key performance indicators set out in the framework, opportunities for improvement have been identified for three indicators. These three indicators involve communication with regulated entities, improvements in assessment of proposed policy changes, and streamlining of compliance and monitoring approaches.
APRA conducted this self-assessment against the Regulator Performance Framework of the government. The framework comprises six key performance indicators, also known as KPIs, that articulate the overarching expectations of regulator performance by the government, namely:
- KPI 1: Regulators do not unnecessarily impede the efficient operation of regulated entities.
- KPI 2: Communication with regulated entities is clear, targeted, and effective.
- KPI 3: Actions undertaken by regulators are proportionate to the regulatory risk being managed.
- KPI 4: Compliance and monitoring approaches are streamlined and coordinated.
- KPI 5: Regulators are open and transparent in their dealings with regulated entities.
- KPI 6: Regulators actively contribute to the continuous improvement of regulatory frameworks.
In promoting financial stability in Australia, APRA continues to balance financial safety with efficiency, competition, contestability, and competitive neutrality in line with its statutory objectives. APRA achieved its target of 100% compliance with Office of Best Practice Regulation (OBPR) requirements for all changes to the prudential framework made across all regulated industries in 2018-19; this included the preparation of formal Regulatory Impact Statements (to assess the costs and benefits of proposed policy changes), where required. Despite being assessed as compliant by the OBPR, the 2019 biennial stakeholder survey indicated that only 31% (23% in 2017) of stakeholders consider that changes to APRA’s prudential framework sufficiently consider the costs of regulation imposed on industry. Although an improvement, this suggests there is significant opportunity for APRA to improve transparency on the assessment of costs (and benefits) for proposed policy changes, and better communicate this process with APRA’s stakeholders.
Furthermore, a key objective (and related actions) included in APRA’s 2019-2023 Corporate Plan is to improve external engagement by expanding communications to promote better prudential outcomes and drive accountability, including demonstrating how APRA balances its objectives. This was reinforced by the Capability Review of APRA. Improving transparency on the assessment of costs and benefits for proposed policy changes (such as meeting OBPR requirements) will also be addressed.
Related Links
Keywords: Asia Pacific, Australia, Banking, Insurance, Self Assessment, Capital Review, Superannuation, Financial Stability, APRA
Previous Article
PRA Amends Rulebook and Capital+ and RFB Reporting TemplatesRelated Articles
EBA Issues Erratum for Phase 2 Package of Reporting Framework 3.0
EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.
EBA Updates Lists of Entities for Use in Capital Calculations under SA
EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.
MAS Amends Notice on Related Party Transactions of Banks
MAS amended Notice 643A that addresses requirements for banks to prepare statements of exposures and credit facilities to related concerns or parties.
ECB Amends Guideline on Euro Short-Term Rate
ECB has published, in the Official Journal of the European Union, the Guideline 2021/565 on the euro short-term rate (€STR) and this guideline amends the previous ECB Guideline 2019/1265.
EBA Consults on Standards Related to FRTB-SA
EBA launched a consultation on the draft regulatory technical standards on the list of countries with an advanced economy for calculating the equity risk under the alternative standardized approach (FRTB-SA).
PRA Proposes Rules Related to IRB Approach for Credit Risk
PRA is proposing, via CP7/21, the approach to implementing new requirements related to the specification of the nature, severity, and duration of an economic downturn in the internal ratings-based (IRB) approach to credit risk.
BoE Outlines Regulatory Treatment of Recovery Loan Scheme of UK
The UK government launched the Recovery Loan Scheme (RLS) as part of its continued COVID-19 support for UK businesses, as announced by HM Treasury on March 03, 2021.
FSB Addresses G20 on COVID Measures, TBTF Reforms, and Climate Risks
FSB published a letter, from its Chair Randal K. Quarles, to the G20 Finance Ministers and Central Bank Governors, ahead of their virtual meeting on April 07, 2021.
OSFI Unwinds Temporary Increase to Covered Bond Limit for Banks
OSFI issued a letter to the deposit-taking institutions issuing covered bonds and announced the unwinding of the temporary increase to the covered bond limit for deposit-taking institutions, effective immediately.
EU Amends CRR and Securitization Regulation in Response to Pandemic
To support recovery from the COVID-19 crisis, EU has published two regulations to amend the securitization framework, as set out in the Securitization Regulation (2017/2402) and the Capital Requirements Regulation or CRR (575/2013).
