APRA's performance framework measures progress against our three strategic objectives: financial safety and stability; regulatory balance and transparency; and organisational effectiveness. This year, we have refined our framework to demonstrate our impact, more clearly explaining how we support productivity and use our resources efficiently. Our changes have sought to align APRA with best practice under the PGPA Act and Government’s updated Statement of Expectations for APRA. We expect to make further refinements over the coming years as we continue to strengthen our data and technology capabilities.
Objective 1: Financial safety and stability
Outcome | Performance measure | Target |
|---|---|---|
APRA-regulated entities are financially resilient
| Reported prudential capital ratios for banks and insurers | Low incidence of banks and insurers falling below minimum requirements |
Reported prudential liquidity ratios for banks | Low incidence of banks falling below minimum requirements outside periods of stress | |
Standard & Poor’s risk rating for the Australian banking system | Low risk rating for the Australian banking industry institutional framework | |
APRA-regulated entities are operationally resilient | Qualitative assessment of operational disruptions at APRA-regulated entities | Low incidence of operational disruptions with material impact on financial system stability |
Superannuation funds are managing funds in members’ best financial interests
| Number of superannuation members exposed to funds facing multiple strategic challenges | Low incidence |
Number of superannuation members in MySuper or Choice products that fail the Performance Test | Low incidence | |
APRA supervisors are holding regulated entities to account for addressing material prudential risks
| Number of APRA-regulated entities in formal APRA remediation for longer than 12 months | Low incidence of regulated entities over the reporting period |
Stakeholders agree that APRA's supervision enhances the financial and operational strength of regulated entities | 80 per cent or more of survey respondents | |
Number of APRA-regulated significant financial institutions with an increase in supervisory risk ratings of two or more stages within a two-month period | Low incidence | |
The financial system can withstand future stress
| Stress test results at an industry level | Stress test results indicate that the industry can withstand a severe, plausible shock without breaching minimum requirements |
In the event of an entity failure, Australian beneficiaries are protected | Losses from entity exits borne by beneficiaries | Low |
Objective 2: Regulatory balance and transparency
Outcome | Performance measure | Target |
|---|---|---|
APRA adequately balances competition and efficiency considerations
| Stakeholders agree that APRA effectively pursues financial safety, balanced with considerations of efficiency, competition, contestability and competitive neutrality, and promotes financial stability | 80 per cent or more of survey respondents |
Qualitative assessment based on trends in banks’ lending | The prudential framework does not unduly restrict banks’ ability to lend to households and businesses | |
Sharing of data collections with other agencies | APRA consults with peer agencies on data sharing for all new and substantially revised data collections | |
Larger and more complex entities are subject to more stringent prudential requirements | Qualitative assessment based on new material policy consultations | Non-SFIs are subject to simpler requirements or other transitional support, where appropriate |
Larger and more complex entities are subject to more heightened supervisory demands | Number of formal supervisory engagements for large and complex entities compared to small and less complex | On average, Tier 1 entities are subject to significantly more formal supervisory engagements than Tier 4 entities |
APRA’s policy changes are subject to external scrutiny | Policy consultations undertaken | All major policy proposals are subject to public review and APRA publicly responds to issues raised by external stakeholders |
Objective 3: Organisational effectiveness
Outcome | Performance measure | Target |
|---|---|---|
APRA is an effective regulator | Qualitative assessment of APRA’s effectiveness, based on findings from independent reviews | APRA is viewed as a high-quality regulator |
APRA’s communication is clear | Stakeholders agree that APRA’s prudential standards are effective in communicating APRA’s requirements | 80 per cent or more of survey respondents |
APRA manages its financial resources efficiently | Budgeted versus actual expenditure | Within budget |
APRA manages its operations efficiently
| Delivery of services are in line with commitments to stakeholders (Service Charter) | 100 per cent |
APRA connect data submissions complete within 15 minutes | 99 per cent or more | |
Staff in supervision-focused roles | 60 per cent or more | |
Level of staff engagement | 80 per cent or more survey engagement score |