APRA Insight - Issue Three 2020

A message from APRA Special Projects Director, Heidi Richards

Welcome to the third edition of APRA Insight for 2020.

Features

COVID-19: A real-world test of operational resilience

The COVID-19 pandemic has put operational resilience in the spotlight, and is highlighting how entities can improve their ability to withstand shocks.

 

COVID-19: How APRA has adapted to remote supervision

The shift to remote working due to COVID-19 has seen APRA adopt new strategies to effectively supervise the entities it regulates.

Managing super fund liquidity in the midst of COVID-19

Superannuation trustees have managed liquidity well overall during COVID-19, but APRA has also identified room for improvement in their management of liquidity risk.

Insights from APRA’s 2020 InsurTech Survey

APRA outlines the findings from its inaugural InsurTech survey of the general insurance industry.

APRA Explains

Liquidity in banking

APRA explains funding liquidity, which is central to the safety and stability of banks.

On the horizon

On 23 September, it will be exactly six months since APRA announced it was suspending the majority of its planned policy and supervision initiatives in response to the impact of COVID-19. At the time, APRA stated that it didn’t intend to “recommence consultation on any non-essential matters before 30 September 2020.”

As the end of September draws closer, APRA has been signalling what its first priorities will be in the later stages of the year, as its policy and supervisory agenda begins to resume after the pandemic-related hibernation. In the past fortnight, APRA formally confirmed it will shortly recommence public consultations on select policy reforms, as well as beginning a phased resumption of the issuing of new licenses. The announcement confirmed that APRA’s top policy priorities for the remainder of 2020 are:

• the cross-industry prudential standard for remuneration; 
• capital reforms for authorised deposit-taking institutions incorporating APRA’s unquestionably strong framework, Basel III and measures to improve transparency, comparability and flexibility;
• insurance capital reforms to incorporate changes in the accounting framework (AASB 17); and
• the prudential standard for insurance in superannuation, and updated guidance on the sole purpose test.

Those seeking a longer-term view of APRA’s priorities needn’t wait long – next week APRA will release at its updated Corporate Plan covering the four years to 2024.