The APRA has required several banks to....>

AUSTRALIA: The APRA has required several banks to tighten the intra-group

funding arrangements for their Australian operations.

- Following a review of funding agreements across the ADI industry, APRA has

notified Macquarie, Rabobank & HSBC that the reporting of their intra-group

funding as stable has been in breach of the prudential liquidity standard [1].

- APRA's review found these banks were improperly reporting the stability of the

funding they received from other entities within the group. These banks had

provisions in their funding agreements that would potentially allow the group

funding to be withdrawn in a stress scenario. APRA is requiring these banks to

strengthen intra-group agreements to ensure term funding cannot be withdrawn in

a financial stress scenario. APRA is also requiring these banks to restate their

past funding & liquidity ratios where these had been reported incorrectly, to

provide transparency to investors & the broader community. Supervisors are

considering a range of further options, including the imposition of higher

funding & liquidity requirements on these ADIs.

- Link: https://tinyurl.com/y4cqvv89