APRA wants to make Australian banks safer in volatile market

Australia’s financial regulator is working to pull smaller banks into line with the majors, as it seeks to make the banking system more resilient against conditions that led to theOn Thursday, Australian Prudential Regulation Authority chair John Lonsdale told an investment conference in Sydney that the regulator was reinforcing liquidity and interest rate risk requirements to bolster Australia’s banking system.

Lonsdale added that none of the banks breached their prudential requirements on capital, and all retained sufficient liquidity and continued to provide credit to households and businesses under the hypothetical scenario.However, he warned that APRA had to balance its need to maintain competition in banking with keeping the system secure.

“The consultation is examining targeted changes to the simpler minimum liquidity holdings approach used to calculate the requirements for smaller banks, which stands in contrast to the more complex and sophisticated liquidity coverage ratio used by larger banks,” he said. “Our goal is to ensure all banks reflect the market value of their liquid assets for regulatory purposes and don’t get caught short in the way SVB did.

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