The Australian Prudential Regulation......>

AUSTRALIA: The Australian Prudential Regulation Authority (APRA) has released

its response to submissions on proposed changes to the application of the

capital adequacy framework designed to support the orderly resolution of a

failing authorised deposit-taking institution (ADI). APRA released a discussion

paper in November last year proposing that the four major Australian banks be

required to increase their Total Capital by 4 to 5 percentage points of risk

weighted assets (RWA) over 4 years. APRA expected the banks would meet the bulk

of this requirement by raising additional Tier 2 capital.

- Following extensive engagement with a range of stakeholders, APRA has

announced an approach that will meaningfully lift the loss-absorbing capacity of

the 4 major banks. APRA will require the major banks to lift Total Capital by 3

percentage points of RWA by 1 Jan '24. APRA's overall long term target of an

additional 4 to 5 percentage points of loss absorbing capacity remains unch.

Over the next 4 years, APRA will consider the most feasible alternative method

of sourcing the remaining one to 2 percentage points, taking into account the

particular characteristics of the Australian financial system.