AST APRA Regulator Priorities, Covid
On May 21, AST APRA spoke on adjustment to post-Covid world.
- APRA Chair, Wayne Byres, spoke during FINSIA webinar on APRA’s response to Covid.
- Strong Financial System
- Australia entered 2020 with a financial sector in good financial health overall.
- Major banks had strong balance sheets, liquidity and funding profiles, high capital, better asset quality, allowed banks to act as shock absorber for the economy.
- In Jan. 2020, APRA published policy and supervisory agenda for 2020, 8 weeks later announced most of it deferred until end Sep. 2020, many will not restart until 2021.
- Also issued statement regarding the unquestionably strong capital benchmarks.
- Relaxed benchmarks to ensure banks were well capitalized in the event of stress.
- Wrote to banks and insurers in early Apr. 2020 asking that they seriously consider deferring, or materially reducing, discretionary capital distributions in months ahead.
- Some chose to defer dividends, while those that paid have generally offset them with other capital raisings, APRA recognize important role they play in investment returns.
- Mandate to protect bank deposits safety, ensure insurers have means to pay claims.
- Loan Repayment Deferrals
- APRA does not determine whether or how banks choose to offer customer support, but does have role in deciding the capital and reporting treatment of those loans.
- APRA capital concessions to banks offering loan deferrals granted because, although some customers will not recover, banks in strong starting position to absorb losses.
- Prudence is appropriate for now, APRA approach designed to underpin financial system stability over longer term and to help facilitate adjustments not excessively disruptive.
||B/D; Bank; Corp; SIFI
||PR, Sp, 5/21/2020; COVID-19
||BCS; Financial; Operations; Reporting; Risk; Trading; Treasury
||Banking; Loan; Repo/Reverse; Securities
|Reg. Last Update
Last substantive update on 05/21/2020