APRA has suspended the majority of planned policy and supervision initiatives in response to the COVID-19 disruption. All substantive public consultations and actions to finalize revisions to the prudential framework that are underway or upcoming, including consultations on prudential and reporting standards, have been suspended. As of now, APRA does not plan to recommence consultation on any non-essential matters before September 30, 2020. APRA is also reconsidering the implementation dates and transition timeframes for prudential and reporting standards that have been recently finalized but not yet implemented. Further details on any adjustments will be provided shortly.
APRA may continue to progress certain data reporting initiatives where they are critical to meeting its mandate in the current environment, including new data collections related to the impact of COVID-19. Over the period ahead, the primary focus of supervision will be on monitoring the impact of COVID-19 on the financial and operational capacity of regulated institutions. Consequently, the supervisory priorities of APRA, outlined in January 2020, will be largely suspended until at least September 30. The refocused supervision effort will involve frequent communication with entities, monitoring key financial settings, such as capital and liquidity, and responding accordingly. These engagements will be conducted virtually, unless absolutely necessary, and will continue as long as necessary.
APRA also confirmed its regulatory approach to the COVID-19 support packages being offered by banks and other lenders to their borrowers in the current environment. Many banks have recently announced COVID-19 support packages that provide affected borrowers with an option to defer their repayments for a period of up to six months. These packages have mainly been offered to small business and home loan customers. APRA will be writing to all authorized deposit-taking institutions to advise them of the specific reporting treatment for loans subject to these support arrangements. APRA will require authorized deposit-taking institutions to report to APRA, and publicly disclose, the nature and terms of any repayment deferrals and the volume of loans to which they are applied. Regardless, authorized deposit-taking institutions must continue to provision for these loans under the relevant accounting standards.
Keywords: Asia Pacific, Australia, Banking, Insurance, Securities, COVID 19, Reporting, Data Collection, Prudential Standards, APRA
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous ArticleESRB Updates List of Countercyclical Capital Buffers in March 2020
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.
The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.
Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)
The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)