The Australian Prudential Regulation Authority (APRA) is seeking submissions from interested parties on the updated proposals for the reform of the international capital adequacy guidelines for banks released by the Basel Committee on Banking Supervision earlier this week.

The proposal incorporates findings of the third Quantitative Impact Study (QIS3) undertaken in late 2002, a summary of which will be released on 5 May. It is accompanied by an overview of the new capital adequacy framework and also an outline of alterations to the proposals since the release of the QIS3 Technical Guidance document in October 2002, which banks have used to assess the impact of the New Accord on their portfolios.

The Basel Committee has requested comments on the new proposed guidelines by 31 July 2003 and intends to release a final version of the New Capital Accord by late 2003. Implementation of the finalised framework is envisaged by year-end 2006.

APRA applies the Basel Committees framework to all authorised deposit-taking institutions (ADIs) in Australia. Local submissions should be sent to Mr Guy Eastwood, APRAs Senior Manager - Capital and Risk Analysis, by end June.

The Committees current guidelines, set out in the 1988 Basel Capital Accord, have become the global benchmark for bank capital adequacy. It has released two previous consultation proposals - its original reform in June 1999 and a revised consultative paper in January 2001. A copy of the latest consultation paper is available from the BIS website (www.bis.org).

APRA is the prudential regulator of the financial services industry including banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry.  It currently regulates $1.5 trillion in assets for 20 million Australians.