News and Publications

In its November 2024 update, APRA confirmed it will maintain its existing macroprudential policy settings, including the serviceability assessment buffer, the countercyclical capital buffer and the absence of lending limits, following its assessment of financial stability risks.

Climate change presents risks to the financial system and the APRA-regulated entities that operate within it. This includes physical, transition, and liability risks which are collectively referred to as climate risks in this Information Paper.

This Discussion Paper outlines potential amendments to APRA’s prudential framework to ensure that the capital strength of the Australian banking system operates more effectively in stress, proposing to replace Additional Tier 1 (AT1) capital with more reliable and effective forms of capital.

This information paper aims to help accountable entities and their accountable persons understand and meet their obligations under the Financial Accountability Regime, while outlining how the Regulators will jointly administer the FAR and exercise their regulatory and enforcement powers.

In this paper, we explain how the capital adequacy rules for housing lending work and explore two key questions.

APRA has decided to maintain its existing macroprudential policy settings. The mortgage serviceability buffer will remain at 3 percentage points, and the countercyclical capital buffer will stay at 1 per cent of risk-weighted assets.

The FAR replaces the Banking Executive Accountability Regime (BEAR) and will apply to authorised deposit-taking institutions (ADIs) and their authorised non-operating holding companies (NOHCs) from 15 March 2024.

A key area of focus for APRA as part of this assessment is the effectiveness of Additional Tier 1 capital (AT1).  AT1 instruments are a critical part of banks’ financial resilience: they are designed to absorb losses in stress and provide capital to support bank resolution at the point of failure.

The management of operational risk is of critical importance, as demonstrated by operational risk failures and business disruptions in the past. All APRA-regulated entities need to ensure that they are well placed to manage operational risk and respond to business disruptions when they inevitably occur.