Revisions to the capital framework for authorised deposit-taking institutions
APRA is consulting on revisions to the capital framework for authorised deposit-taking institutions (ADIs) to implement ‘unquestionably strong’ capital ratios and the Basel III reforms.
The December 2020 consultation includes APRA's responses to the August 2018 consultation on improving the transparency, comparability and flexibility of the ADI capital framework, the June 2019 consultation on the revisions to the ADI capital framework and the November 2019 consultation on the leverage ratio requirement for ADIs.
Due to the number of consultations APRA is responding to in this package, there are two papers: a discussion paper that provides a high level overview of APRA's proposals and their indicative impacts, and a response to submissions paper that provides a more detailed response to technical issues raised in the prior consultations.
APRA is also releasing for consultation full drafts of Prudential Standard APS 110 Capital Adequacy, Prudential Standard APS 112 Capital Adequacy: Standardised Approach to Credit Risk and Prudential Standard APS 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk.
Written submissions on these drafts standards are requested by 1 April 2021.
The response papers and draft standards can be found below:
Release of final prudential standard APS 115 and consultation on draft reporting standard ARS 115.0
On 11 December 2019, APRA released the final operational risk requirements for authorised deposit-taking institutions (ADIs) which are contained in Prudential Standard APS 115 Capital Adequacy: Standardised Measurement Approach to Operational Risk (APS 115).
In addition, APRA has commenced consultation on a new reporting standard ARS 115.0 Capital Adequacy: Standardised Measurement Approach to Operational Risk (ARS 115.0), which will collect data from ADIs reflecting the prudential requirements set out in APS 115.
Written submissions on draft ARS 115.0 are requested by 21 February 2020.
The response letter, APS 115 and draft ARS 115.0 can be found below:
Response paper on interest rate risk in the banking book requirements
The September 2019 consultation includes APRA’s response to the submissions received in relation to its initial proposals on the revised interest rate risk in the banking book (IRRBB) requirements, and commences a detailed consultation on other amendments to strengthen the IRRBB prudential framework. It also includes a draft Prudential Standard APS 117 Capital Adequacy: Interest Rate Risk in the Banking Book.
Written submissions are requested by 6 December 2019.
The June 2019 consultation includes APRA’s response to its initial proposals on revised credit risk and operational risk requirements, and simpler prudential requirements for small, less complex ADIs. It also includes draft prudential standards APS 112 Capital Adequacy Standardised Approach to Credit Risk, APS 113 Capital Adequacy Internal Ratings-based Approach to Credit Risk (residential mortgages extract only) and APS 115 Capital Adequacy Standardised Measurement Approach to Operational Risk.
Written submissions are requested by 6 September 2019.
We received the following non-confidential submissions in response to the consultation on revisions to the capital framework for ADIs in November 2018:
Consultation on revisions to the capital framework for ADIs
The February 2018 consultation outlined APRA’s initial proposals on revisions to credit risk, operational risk and market risk requirements, as well as proposals for simpler prudential requirements for small, less complex ADIs.
We received the following non-confidential submissions in response to the consultation on revisions to the capital framework for ADIs in February 2018:
Note on submissions
It is APRA's policy to publish all submissions on the APRA website unless the respondent specifically tells APRA in writing that all or part of the submission is to remain confidential. An automatically generated confidentiality statement in an email does not satisfy this purpose. If you would like only part of your submission to be confidential, you should provide this information marked as 'confidential' in a separate attachment.