Featured Product

    APRA Finalizes Credit Risk Management Standard and Associated Changes

    June 14, 2022

    The Australian Prudential Regulation Authority (APRA) finalized amendments its macro-prudential policy framework, along with the associated revisions to the prudential standard on credit risk management (APS 220). It also decided to update its Quarterly Authorized Deposit-taking Institution Performance (QADIP) and Quarterly Authorized Deposit-taking Institution Property Exposures (QPEX) statistical publications. APRA also published its response to the proposed changes to the quarterly statistical publications, along with the mock-up tables with updated explanatory notes and the updated QADIP and QPEX glossaries.

    The new macro-prudential policy framework has been given effect through new requirements on authorized deposit-taking institutions set out in an attachment (Attachment C) to the prudential standard for credit risk management (APS 220). The Attachment C includes a set of credit-based macroprudential measures that APRA could use, if needed, to address risks to financial stability. The Attachment applies to credit exposures in Australia where the majority of the collateral value securing the loan is located in Australia, or for unsecured loans where the ultimate risk of the exposure is located in Australia. Banks will need to have systems in place to limit growth in higher risk residential mortgage lending, such as loans at high debt-to-income multiples or high loan-to-valuation ratios. APRA may require institutions to publicly disclose the level of lending against any limits specified by APRA, for the period in which the limits apply. Institutions will be required to meet the new requirements from September 01, 2022. To ensure appropriate alignment with the final Attachment C to APS 220, APRA is also making corresponding amendments to relevant guidance and reporting standards:

    • APRA updated prudential practice guide on residential mortgage lending (APG 223) to align with new requirements for a prudent setting of the serviceability buffer.
    • APRA updated cross-references across relevant reporting standards, including reporting standard on residential mortgage lending (ARS 223).

    Changes to Quarterly Statistical Publications were proposed in February 2022, with the aim to accommodate the new APS 220, notably to continue the publication of data regarding non-performing loans. APRA received two submissions: one confidential submission from an authorized deposit-taking institution and one non-confidential submission from the Australian Banking Association (ABA submission). The ABA advocated for postponing the first publication until later this year, giving the authorized deposit-taking institutions sufficient time to identify and correct any underlying data issues in the new reporting form. However, APRA intends to release the quarterly statistical publications on schedule, as no significant data issues have been identified in the first quarterly submissions and the data on asset quality is key to monitoring the health of the banking system. In the given situation, APRA views the risk of delaying the publication of key data series as greater than the risk of potential data quality concerns. Thus, APRA will proceed with the proposed updates to QADIP and QPEX, with the updated statistical publications slated to be first released on June 14, 2022, for the March 2022 reference period.

     

    Related Links

     

    Keywords: Asia Pacific, Australia, Banking, Credit Risk, APS 220, Lending, Reporting, ARS 223, Macro-Prudential Policy, RRE, QADIP, QPEX, Statistical Reporting, APRA

    Featured Experts
    Related Articles
    News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    News

    IOSCO Welcomes Work on Sustainability-Related Corporate Reporting

    The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News
    News

    BoE Allows One-Day Delay in Statistical Data Submissions by Banks

    The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.

    September 14, 2022 WebPage Regulatory News
    News

    ACPR Amends Reporting Module Timelines Under EBA Framework 3.2

    The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.

    September 14, 2022 WebPage Regulatory News
    News

    ECB Paper Discusses Disclosure of Climate Risks by Credit Agencies

    The European Central Bank (ECB) published a paper that examines how credit rating agencies accepted by the Eurosystem, as part of the Eurosystem Credit Assessment Framework (ECAF)

    September 13, 2022 WebPage Regulatory News
    News

    APRA to Modernize Prudential Architecture, Reduces Liquidity Facility

    The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.

    September 12, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8514