Australia

Details

  • Service: Advisory, Risk Consulting, Topics, Managing Risk & Complexity, Risk Systems for Financial Services, Financial Services Regulation
  • Industry: Financial Services, Banking
  • Type: Regulatory update
  • Date: 7/05/2013

APRA announces its Basel III Liquidity Reforms 

APRA's update on revised liquidity requirements offers greater clarity in respect to the liquidity levels banks and other ADIs will be expected to hold, however a number of important issues remain unresolved.
Basel III liquidity reforms cover
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From 1 January 2015, the minimum liquidity holdings (MLH) to be held by ADIs will be tied to their ability to pass a 30-day stress test, and their preparedness for an APRA liquidity audit.

 

This will impact most ADIs that currently calculate their liquidity as 9 percent of liabilities and usually provide liquidity information to APRA in an ad hoc manner.

 

Key insights

  • Most ADIs will need to change several aspects of their pricing, risk and reporting systems.
  • APRA has provided clarity on run-off factors for funding.
  • Clarity provided on the transitional timeline implementation and recognition of additional high quality liquid assets.

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