The process of developing harmonised standards for Approved Deposit-taking Institutions (ADIs) is now largely complete. Over the past six months, draft standards covering liquidity, credit quality, capital, audit arrangements, large exposures and equity associations, have been issued by APRA for industry comment. Comments and submissions received have been invaluable in identifying the key issues and the potential tensions that arise in developing a single prudential framework for an industry as diverse as ADIs.
A small number of contentious issues have arisen out of the industry discussions and submissions, and we wish to consider fully these matters and respond appropriately to industry views, before the standards are finalised. These include such matters as limits on large exposures, the treatment of future income tax benefits and the level of general provisioning. Some of the issues (such as large exposures) also link to our longer-term work on policies relating to conglomerates which is scheduled for completion towards the end of this year. To ensure that these various issues receive due consideration, we have decided now to aim for a release date for the new standards in September.
We emphasise that all ADIs that are fully compliant with existing prudential regimes will be deemed compliant with the harmonised standards when the latter come into effect in September. Transition periods will be negotiated where necessary with individual institutions or groups of institutions where the harmonised standards call for different requirements from those currently in place.
Further information:
Brian Gray
Executive General Manager
Policy, Research and Consulting
(02) 9210 3141
