Australian banks may struggle to meet data gathering component in APRA's new reporting standards
Although APRA’s liquidity reporting guidelines are still conceptual, Australian banks are bound to be tied to more stringent reporting compliance compared to most countries. November 21, 2012 | Esther TanOn November 9th 2012, the Australian Prudential Regulation Authority (APRA) released for discussion a paper outlining its proposed changes to liquidity reporting requirements for authorised deposit-taking institutions (ADIs), welcoming responses to the consultation paper. The discussion paper includes alterations to Reporting Standard ARS 210 Liquidity. These stricter liquidity reporting requirements are proposed with the enhanced ability of monitoring ADI liquidity, relating to Basel III global liquidity standards. The proposed changes to liquidity reporting requirements in Australia will heighten compliance with the new Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR), newly introduced ratios in Basel III, via the help of well-defined reports. The ADI liquidity reporting framework consultation in fact, commenced in September 2009. However, the subprime crisis that brought along Basel III liquidity reforms overwrote the proposals made in that consultation. The limited amount of standardised reporting existing in the current liquidity reporting framework which only applies to ADIs under APRA's Minimum Liquidity Holdings (MLH) approach, calls for the need for more comprehensive standards reaching out to all ADIs. Besides standardised reporting, which will now be applicable to all ADIs, scenario reporting for ADIs and increased reporting requirements for ADIs fall under the MLH regime. As the proposed liquidity reporting framework follows the likes of Basel III’s liquidity framework, amendments will be made accordingly to any changes in Basel guidelines. APRA Chairman Dr John Laker said, “This is a significant expansion to APRA’s data collection on ADI liquidity, consistent with the importance APRA places on the sound management of ADI liquidity risk.” APRA also clarified t... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Australia, Basel III, Regulation, Risk and RegulationAustralia,basel III,riskregulation,Risk and Regulation, Australia,Basel III,Regulation,Risk and Regulation, Keywords:APRA, ADI, LCR, NSFR, MLH, John Laker, RBA, Liquidity Risk APRA, ADI, LCR, NSFR, MLH, John Laker, RBA, Liquidity Risk
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