Featured Product

    APRA Initiates Action Against a Bank for Liquidity Compliance Breach

    October 21, 2020

    APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity. Bendigo and Adelaide Bank informed APRA in September of multiple breaches of APS 210, stemming from IT coding that incorrectly classified some retail deposits in the most stable category of the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR).The breaches, while material, do not impact the overall soundness of the current liquidity position of the bank. However, they raise questions over the bank’s past risk management practices and ability to accurately calculate and report its liquidity ratios.

    The breaches of APS 210 on liquidity are historical in nature and the current liquidity position of bank is comfortably above the minimum regulatory requirements of APRA. To address these concerns, APRA will require a comprehensive review by an independent third party into the bank's adherence to the liquidity requirements of APRA. APRA will require the bank to apply a 10% add-on to the net cash outflow component of its LCR calculation, which will remain in place until the independent review is finalized and shortcomings have been rectified to the satisfaction of APRA. APRA will also require the restatement of relevant disclosures under APS 330 on public disclosure, for the preceding 24-month disclosure period. APRA will wait for the outcome of an internal Bendigo and Adelaide Bank review before determining whether further action is required. APRA Deputy Chair John Lonsdale said, “In taking these actions, our priority is to ensure the underlying causes of the compliance failures are properly identified and addressed. It also sends a message to the wider banking industry that such breaches of our prudential standards are not acceptable, and APRA will respond in a commensurate manner, including applying penalties where appropriate.”


    Related Links

    Keywords: Asia Pacific, Australia, Banking, Liquidity Risk, APS 210, LCR, NSFR, APS 330, Bendigo and Adelaide Bank, Disclosures, Basel, APRA

    Featured Experts
    Related Articles

    EBA Finalizes Templates for One-Off Climate Risk Scenario Analysis

    The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.

    November 28, 2023 WebPage Regulatory News

    EBA Mulls Inclusion of Environmental & Social Risks to Pillar 1 Rules

    The European Banking Authority (EBA) recently published a report that recommends enhancements to the Pillar 1 framework, under the prudential rules, to capture environmental and social risks.

    October 31, 2023 WebPage Regulatory News

    BCBS Consults on Disclosure of Crypto-Asset Exposures of Banks

    As a follow on from its prudential standard on the treatment of crypto-asset exposures, the Basel Committee on Banking Supervision (BCBS) proposed disclosure requirements for crypto-asset exposures of banks.

    October 19, 2023 WebPage Regulatory News

    BCBS and EBA Publish Results of Basel III Monitoring Exercise

    The Basel Committee on Banking Supervision (BCBS) and the European Banking Authority (EBA) have published results of the Basel III monitoring exercise.

    October 18, 2023 WebPage Regulatory News

    PRA Updates Timeline for Final Basel III Rules, Issues Other Updates

    The Prudential Regulation Authority (PRA) recently issued a few regulatory updates for banks, with the updated Basel implementation timelines being the key among them.

    October 18, 2023 WebPage Regulatory News

    US Treasury Sets Out Principles for Net-Zero Financing

    The U.S. Department of the Treasury has recently set out the principles for net-zero financing and investment.

    October 17, 2023 WebPage Regulatory News

    EC Launches Survey on G7 Principles on Generative AI

    The European Commission (EC) launched a stakeholder survey on the draft International Guiding Principles for organizations developing advanced artificial intelligence (AI) systems.

    October 14, 2023 WebPage Regulatory News

    ISSB Sustainability Standards Expected to Become Global Baseline

    The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.

    September 18, 2023 WebPage Regulatory News

    IOSCO, BIS, and FSB to Intensify Focus on Decentralized Finance

    Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.

    September 18, 2023 WebPage Regulatory News

    BCBS Assesses NSFR and Large Exposures Rules in US

    The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.

    September 14, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8938