Featured Product

    APRA Applies Additional Capital Requirements to Three Australian Banks

    July 11, 2019

    APRA is applying additional capital requirements to three major banks in Australia to reflect higher operational risk identified in their risk governance self-assessments. The minimum capital requirement of ANZ, National Australia Bank, and Westpac is being increased by USD 500 million each. The capital add-ons will apply until the banks have completed their planned remediation to strengthen risk management and have closed gaps identified in their self-assessments.

    APRA supervisors continue to provide tailored feedback to other banks, insurers, and superannuation licensees that provided self-assessments to APRA. Where weaknesses have been identified, the level of supervisory scrutiny is being increased as remediation actions are implemented. Where material weaknesses exist, APRA is also considering the need for the application of an additional operational risk capital requirement.

    This increase in capital requirements follows APRA’s decision, in May 2018, to apply a USD 1 billion capital add-on to the Commonwealth Bank of Australia in response to the findings of the APRA-initiated prudential inquiry into the bank. Following the final report of the inquiry, APRA wrote to the boards of 36 of the largest banks, insurers, and superannuation licensees in the country asking them to gauge whether the weaknesses uncovered by the inquiry also existed in their own companies. Although the self-assessments raised no concerns about financial soundness, it was confirmed that many of the issues identified in the inquiry were not unique to the Commonwealth Bank of Australia. This included the need to strengthen non-financial risk management, to ensure that accountabilities are clear, cascaded, and enforced,  and to address the long-standing weaknesses and enhance risk culture.

     

    Related Links 

    Keywords: Asia Pacific, Australia, Banks, Capital Requirements, Operational Risk, ANZ, National Australia Bank, Westpac, Regulatory Capital, APRA

    Featured Experts
    Related Articles
    News

    PRA Consults on Implementation of Certain Provisions of CRD5

    PRA, via the consultation paper CP12/20, proposed changes to its rules, supervisory statements, and statements of policy to implement certain elements of the Capital Requirements Directive (CRD5).

    July 31, 2020 WebPage Regulatory News
    News

    EIOPA Report Identifies Key Financial Stability Risks for Insurers

    EIOPA published the financial stability report that provides detailed quantitative and qualitative assessment of the key risks identified for the insurance and occupational pensions sectors in the European Economic Area.

    July 30, 2020 WebPage Regulatory News
    News

    EBA Publishes Risk Dashboard for First Quarter of 2020

    EBA published its risk dashboard for the first quarter of 2020 together with the results of the risk assessment questionnaire.

    July 30, 2020 WebPage Regulatory News
    News

    EBA Issues Updates on Stress Test Exercise for Banks in EU

    EBA announced that the next stress testing exercise is expected to be launched at the end of January 2021 and its results are to be published at the end of July 2021.

    July 30, 2020 WebPage Regulatory News
    News

    PRA Proposes Guidance Related to Matching Adjustment under Solvency II

    PRA published the consultation paper CP11/20 that sets out its expectations and guidance related to auditors’ work on the matching adjustment under Solvency II.

    July 30, 2020 WebPage Regulatory News
    News

    MAS Issues Guidance on Dividend Distributions by Banks

    MAS published a statement guidance on dividend distribution by banks.

    July 30, 2020 WebPage Regulatory News
    News

    APRA Updates Guidance on Capital Management for Banks

    APRA updated its capital management guidance for banks, particularly easing restrictions around paying dividends as institutions continue to manage the disruption caused by COVID-19 pandemic.

    July 29, 2020 WebPage Regulatory News
    News

    FSB Report Reviews Macro-Prudential Framework and Tools in Germany

    FSB published a report that reviews the progress on data collection for macro-prudential analysis and the availability and use of macro-prudential tools in Germany.

    July 29, 2020 WebPage Regulatory News
    News

    EBA Urges Firms to Finalize Preparations for End of Brexit Transition

    EBA issued a statement reminding financial institutions that the transition period between EU and UK will expire on December 31, 2020; this will end the possibility for the UK-based financial institutions to offer financial services to EU customers on a cross-border basis via passporting.

    July 29, 2020 WebPage Regulatory News
    News

    SRB on Operational Continuity in Resolution and FMI Contingency Plans

    SRB published guidance on operational continuity in resolution and financial market infrastructure (FMI) contingency plans.

    July 29, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5606