Oct162017 by Connor JamesNo Comments
Banking Executive Accountability Regime Exposure Draft – Part Two

Banking Executive Accountability Regime Exposure Draft – Part Two

Uncategorized
Last time in The Banking Executive Accountability Regime (BEAR) Exposure Draft - Part One we talked about the new role of an ‘accountable person’ under the proposed Banking Executive Accountability Regime (BEAR), as described in the Government’s recent exposure draft Bill. In today’s piece, part two, we look at the what happens when an accountable person, or the bank itself, fail to fulfil its obligations under BEAR. By Dr Drew Donnelly, Compliance Quarter   Existing Powers of APRA The Australian Prudential Regulation Authority (APRA) already has a range of powers that it uses to ensure Authorised Deposit-Taking Institutions (ADIs) (including banks) fulfil their responsibilities under the prudential supervision requirements. APRA’s current powers include: the power of direction (section 11CA of the Banking Act 1959), which enables APRA to require a…
Read More
Jul242017 by Ben WilsonNo Comments
APRA’s new capital benchmarks for banks

APRA’s new capital benchmarks for banks

Uncategorized
The Australian Prudential Regulation Authority (APRA) has just announced that it is increasing the capital adequacy ratios for banks and other authorised deposit-taking institutions (ADIs) in Australia, with the new rates to be in place by January 2020. Today we explain what the relevant capital adequacy ratio is, the different methods used to calculate it and describe the two new benchmarks. By Dr. Drew Donnelly, Compliance Quarter Background In Expected credit loss: the new way banks must recognise shifting credit risk we discussed APRA recent changes to the way in which banks must recognise impairment of loans. The goal with that change was to make sure banks “maintain provisions and reserves adequate to absorb existing and estimated future credit losses into its business”. Another important tool employed by APRA to…
Read More
Jul112017 by Ben WilsonNo Comments
Expected Credit Loss: The New Way Banks Must Recognise Shifting Credit Risk

Expected Credit Loss: The New Way Banks Must Recognise Shifting Credit Risk

Financial Services
In OTC derivatives trading in Australia – are you playing by the rules? we looked at how new regulatory requirements have been introduced for some financial products (in that case, over-the-counter (OTC) derivatives), in the wake of the global financial crisis. New reporting rules and ‘mandatory clearing’ are intended to make the risks in these trades more transparent. By Dr. Drew Donnelly, Compliance Quarter Similarly, today’s topic concerns new rules intended to increase the transparency in the risk profile of a bank’s (or any other authorised deposit-taking institution’s), loan portfolio. On July 4, the Australian Prudential Regulation Authority (APRA) issued a letter to all Authorised Deposit-Taking Institutions titled Provisions for Regulatory Purposes and AASB 9 Financial Instruments. It sets out how APRA will apply a new ‘expected credit loss’ model…
Read More