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APRA releases final package to implement Basel III capital reforms

Tuesday 13 November 2012



The Australian Prudential Regulation Authority (APRA) today released a package of final measures that completes APRA’s implementation of the Basel III capital reforms for authorised deposit-taking institutions (ADIs) in Australia.

The package released today includes APRA’s response to submissions received on its proposed requirements for counterparty credit risk capital and other measures, which were released in draft form in August this year.

In addition to the response paper, the package includes final versions of seven relevant prudential standards, two prudential practice guides and accompanying reporting standards, and revised guidelines on the recognition of External Credit Assessment Institutions.

The Basel III capital framework was introduced by the Basel Committee on Banking Supervision in December 2010 to raise the quality and consistency of the capital base and harmonise other elements of capital. In addition, Basel III improves the risk coverage of the Basel II Framework by strengthening the capital requirements for counterparty credit risk exposures arising from banks’ derivatives, repurchase and securities financing activities.

APRA’s consultations on implementing the Basel III capital reforms in Australia began with the release of a discussion paper outlining APRA’s broad approach in September 2011 and have continued through 2012. In 2013, APRA will begin consultations on the Basel III disclosure requirements.

The package released today can be found on the APRA website.

The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding $6 trillion in assets for Australian depositors, policyholders and superannuation fund members.