Skip to main content

Regional banks respond to APRA announcement about average risk weightings for advanced banks

20 July 2015 |Media centre

Four of Australia's leading regional banks – Bendigo and Adelaide Bank, BOQ, ME and Suncorp Bank – have today welcomed the Australian Prudential Regulation Authority's (APRA) announcement that it intends to implement a key recommendation of the Financial System Inquiry.

APRA today confirmed authorised deposit-taking institutions accredited to use the internal ratings-based approach will have to increase their average risk weightings on Australian residential mortgage exposures from approximately 16 per cent to at least 25 per cent from 1 July 2016.

Standardised banks are already required to hold more capital (with average risk weights of 39 per cent) on their residential mortgage exposures. This remains unchanged.

The regional banks, which have advocated for a set of financial system rules and regulations that would strengthen confidence in Australia's financial system, believe this change is an integral step towards creating a more even playing field for all banks and will increase competitive neutrality in the market.

They are, however, mindful of the need to continue to monitor developments in this area given international regulators are still deliberating about global capital adequacy frameworks.

Related Topics

Connect with us

Bendigo and Adelaide Bank Limited, ABN 11 068 049 178 AFSL / Australian Credit Licence 237879. Any advice provided on this website is of a general nature only and does not take into account your personal needs, objectives and financial circumstances. You should consider whether it is appropriate for your situation. Please read the applicable Disclosure Documents before acquiring any product described on this website. Please also review our Financial Services Guide (FSG) before accessing information on this website. Information on this page can change without notice to you.

© Copyright 2022 Bendigo and Adelaide Bank