Credit risk
June 2024
Minor updates to capital framework for ADIs
On 26 June 2024, APRA released the final prudential standards, prudential practice guides, and reporting standards that have been updated to address specific issues raised by industry on the implementation of the new capital framework. These amendments are minor and technical in nature.
The package published today responds to submissions to the consultation released in December 2023.
The letter to industry, final prudential standards, final prudential practice guides, final reporting standards, and non-confidential submissions can be found below:
Letter
ADI capital reforms: Minor updates
Final prudential standards
Final reporting standards
Final prudential practice guides
Non-confidential submissions
December 2023
Consultation on minor updates to capital framework for ADIs
On 5 December 2023, APRA released for consultation minor amendments to the capital framework for authorised deposit-taking institutions (ADIs).
The proposed updates address specific issues raised by industry on the implementation of the new capital framework. The changes are technical in nature.
Submissions should be sent to ADIPolicy@apra.gov.au by 8 March 2024.
The consultation letter, draft prudential and reporting standards and draft prudential practice guides are available below:
Letter
ADI Capital reforms: Minor updates
Draft prudential standards
Draft reporting standards
Draft prudential practice guides
October 2022
On 31 October 2022, APRA released consequential amendments arising from the capital reforms for authorised deposit-taking institutions. The consequential amendments ensure consistency of APRA’s broader prudential framework with the capital reforms. Alongside the minor amendments, APRA is releasing a letter that outlines feedback from the July 2022 consultation and summarises the amendments.
The letter to industry, marked up and clean versions of the updated prudential standards, prudential practice guides and reporting standards, and a non-confidential submission can be found below:
Letter
ADI capital reforms: Consequential amendments
Prudential standards
Clean versions
Marked up versions
Reporting standards
Clean versions
Marked up versions
Prudential practice guides
Clean versions
Marked up versions
Non-confidential submission
September 2022
On 28 September 2022, APRA published the following Reporting Standard taxonomy artefacts:
- Reporting Standard ARS 110.0 Capital Adequacy - draft taxonomy artefacts
- Reporting Standard ARS 112.0 Capital Adequacy: Standardised Approach to Credit Risk - revised draft taxonomy artefacts
- Reporting Standard ARS 113.0 Capital Adequacy: Internal Ratings-based Approach to Credit Risk - revised draft taxonomy artefacts
- Reporting Standard ARS 115.0 Capital Adequacy: Advanced Measurement Approaches to Operational Risk - final taxonomy artefacts
Draft taxonomy artefacts
APRA has also invited ADIs to a webinar demonstrating the new collections designed for the new capital framework on 13 October 2022. The new collections will be available in the test environment from mid-October.
August 2022
On 10 August 2022, APRA released the final reporting standards that accompany the final capital adequacy and credit risk capital requirements for authorised deposit-taking institutions.
The package published today responds to the consultation released in April 2022 on APRA’s proposed new and updated reporting standards.
APRA is also publishing below taxonomy artefacts for Reporting Standard ARS 112.0 Capital Adequacy: Standardised Approach to Credit Risk and Reporting Standard ARS 113.0 Capital Adequacy: Internal Ratings-based Approach to Credit Risk.
The letter to industry, final reporting standards, draft taxonomy artefacts and non-confidential submissions can be found below:
Letter
Letter to ADIs: Credit risk reporting – Response to submissons
Reporting Standards
Draft taxonomy artefacts
Non-confidential submissions
July 2022
On 26 July 2022, APRA released the final prudential practice guides (PPGs) that accompany the final capital adequacy and credit risk capital requirements for authorised deposit-taking institutions.
APRA is also releasing an updated version of Prudential Standard APS 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk (APS 113) with minor amendments resulting from the consultation on the guidance.
APRA is also initiating consultation on consequential amendments arising from the capital reforms to Prudential Standard APS 120 Securitisation (APS 120), Prudential Standard APS 180 Capital Adequacy: Counterparty Credit Risk (APS 180) and Prudential Standard APS 210 Liquidity (APS 210).
Written submissions on the amendments are requested by 26 August 2022.
Alongside the final PPGs, APRA is releasing a response to submissions paper that provides a more detailed response to technical issues raised in the November 2021 consultation.
The response paper, final guidance, updated APS 113 and non-confidential submissions can be found below:
Response paper
Final prudential practice guide
Prudential standard
Submissions
April 2022
On 7 April 2022, APRA released for consultation interim reporting standards that will accompany the updated prudential standards for capital adequacy and credit risk capital. In addition, APRA also released three reporting standards for consultation that contain consequential changes as a result of updates to ADI capital adequacy and credit risk capital requirements and other minor changes.
Written submissions are requested by 7 June 2022.
The letter to industry and marked up and clean versions of the reporting standards can be found below:
Letter
Reporting standard
November 2021
On 29 November 2021, APRA released the final capital adequacy and credit risk capital requirements for authorised deposit-taking institutions, contained in Prudential Standard APS 110 Capital Adequacy (APS 110), Prudential Standard APS 112 Capital Adequacy: Standardised Approach to Credit Risk (APS 112) and Prudential Standard APS 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk (APS 113).
Alongside the final prudential standards, APRA is releasing two papers: an information paper that outlines the objectives of the new capital framework, and a response to submissions paper that provides a more detailed response to technical issues raised in the December 2020 consultation.
APRA is also releasing for consultation draft guidance on the new framework, contained in Prudential Practice Guide APG 110 Capital Adequacy (draft APG 110), Prudential Practice Guide APG 112 Capital Adequacy: Standardised Approach to Credit Risk (draft APG 112) and Prudential Practice Guide APG 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk (draft APG 113).
Written submissions on the draft guidance are requested by 11 March 2022.
The information paper, response paper, final standards, draft guidance and non-confidential submissions can be found below:
Information paper
Response paper
Prudential standards
Draft guidance
Non-confidential submissions
July 2021
Release of letter on ADI capital reforms: Update on policy settings
On 21 July 2021, APRA released a letter to industry on the ADI capital reforms to provide an update on policy settings, which will be used in a quantitative impact study.
The letter to industry can be found below:
Letter to ADIs: ADI capital reforms: Update.
June 2021
Release of letter on implementation of ADI capital reforms: roadmap to 2023
On 2 June 2021, APRA released a letter to industry on the implementation of the ADI capital reforms to provide a roadmap on the finalisation of the reforms and upcoming releases.
The letter to industry can be found below:
Letter to ADIs: ADI capital reforms: Roadmap to 2023.
December 2020
Response papers
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:
June 2019
Response paper
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.
Submissions
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.
Submissions may be the subject of a request for access made under the Freedom of Information Act 1982 (FOIA). APRA will determine such requests, if any, in accordance with the provisions of the FOIA. Information in the submission about any APRA-regulated entity that is not in the public domain and that is identified as confidential will be protected by section 56 of the Australian Prudential Regulation Authority Act 1998 and will therefore be exempt from production under the FOIA.