APRA has revealed it will pay particular attention to housing lending standards next financial year as discussions begin on its budget.
The federal Treasury has released a paper calling for industry views on the levies it proposes to charge to help fund the prudential regulator’s budget.
APRA has been allocated a budget of $125.1 million for 2015/2016, which is up 2.2 per cent on the current financial year.
Banks and other ADIs will have to pay levies of up to $6 million each to help fund APRA’s activities if the funding proposals are approved.
The suggested levies are $6 million for organisations with asset bases above $500 billion, $3.2 million for those with asset bases between $100 billion and $500 billion, and $1.2 million for those with asset bases between $25 billion and $100 billion.
Organisations with asset bases between $5 billion and $25 billion would pay $240,000, those with asset bases between $500 million and $5 billion would pay $24,000, and those with asset bases between $50 million and $500 million would pay $3,400.
APRA is expected to devote 46 per cent of its time and budget to supervising ADIs, 26 per cent to the insurance sector, 17 per cent to general insurance and 11 per cent to life insurance.
The Treasury paper said APRA will continue to adopt a risk-focused approach in 2015/2016.
“Its supervisory oversight will focus on how regulated institutions respond to emerging risks as the Australian economy adapts to the ending of the minerals investment boom,” it said.
“In the ADI sector, APRA will pay particular attention to housing lending standards in the current context of robust competition and strong price pressures in some housing markets.”
APRA’s policy-related activity will include responding to the recommendations of the Financial System Inquiry and monitoring the impact of the prudential reforms it has introduced since the GFC, according to the Treasury paper.