Powered by MOMENTUM MEDIA
subscribe to our newsletter
Banking body backs APRA’s approach to capital

Banking body backs APRA’s approach to capital

The Australian Bankers’ Association (ABA) has welcomed APRA’s finding that international comparisons will inform, rather than determine, Australia’s approach to bank capital levels.

ABA chief executive Steven Münchenberg said the industry body supports APRA’s view that Australia’s banks are “well-capitalised”, and backs the regulator’s decision to use the capital ratios of foreign banks in the top quartile as a “sense check” rather than a benchmark.

“While making international comparisons is appropriate, the ABA believes that bank capital levels need to be set in response to actual risk levels experienced by banks in Australia, within the internationally agreed Basel framework,” he said.

Advertisement
Advertisement

“The ABA agrees with APRA that no single definition of ‘unquestionably strong’ should be applied, and rather that international comparisons should be used as an input alone.”

Mr Münchenberg said the ABA is also supportive of the regulator’s position that there is no precise way to undertake international comparisons, and noted that the international benchmarks used by APRA are actually more conservative than those documented in the Financial System Inquiry’s (FSI's) final report.

“As noted by the APRA study, a number of assumptions and adjustments are required to make international comparisons, and different approaches to these assumptions and adjustments will influence the final outcome,” he said.

“The ABA also welcomes APRA’s commitment that any strengthening of bank capital adequacy requirements as a result of the FSI and the Basel Committee on Banking Supervision‘s deliberations occurs in an orderly manner.”

Banking body backs APRA’s approach to capital
mortgagebusiness

 

Latest News

Ahead of Parliament returning next week, Prime Minister Scott Morrison has conceded that Australia is facing “challenges and headwinds” ...

Slater and Gordon has filed a class action against AMP claiming compensation for more than 2 million people it alleges have been charged ...

An aggressive monetary policy strategy employed in response to rate cuts in foreign markets would be a “dangerous path to go down”, Rese...

FROM THE WEB
podcast

LATEST PODCAST: Broker share and Westpac U-turn

Do you think the banking royal commission recommendations could negatively impact competition in the mortgage market?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.