Australia

Details

  • Service: Topics, Financial Services Regulation, Recovery & Resolution Plans
  • Industry: Financial Services, Banking
  • Type: Business and industry issue
  • Date: 9/10/2013

Australian Mutuals – Key developments and updates

This series of KPMG publications cover proposed or new prudential reporting changes affecting the Australian Mutuals sector.

Peter Russell

Peter Russell

Partner, National Head of Mutuals

parussell@kpmg.com.au

+61 2 9335 7731

Mutuals: Stress testing, recovery planning and financial crisis testing 

In this update, we provide information on stress testing, recovery planning and financial crisis testing to assist mutuals, building societies and credit unions develop their initiatives in these areas.

These are inter-related tools that can be highly effective in achieving sound risk management and governance in financial institutions of any size and nature.

 

Key insights

  • Stress testing is an important tool to evaluate the potential vulnerability of a financial institution to economic and financial shocks, and to assist in determining appropriate risk management arrangements.
  • APRA has extended recovery planning requirements to the regional banks and a number of other ADIs including mutuals. It will become a permanent component of its supervision activities.
  • One of the most effective ways of assessing the adequacy of the recovery plan, and of making it a living document, is to periodically test it through financial crisis simulation exercises.

Video: Mutuals – Recovery planning, crisis testing and stress testing

Video: Mutuals – Recovery planning, crisis testing and stress testing
We look at the inter-related nature and effectiveness of stress and crisis testing tools for Mutuals or financial institutions of any size or nature.
 

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