The Australian Prudential Regulation Authority has proposed revisions to Prudential Standard APS 330 Public Disclosure (APS 330), in a bid to drive greater transparency for the financial system while minimising complexity for smaller entities.
The APRA proposals seek to align public disclosure requirements for banks with international standards and with APRA’s Unquestionably Strong framework for bank capital.
APRA proposed to introduce a centralised publication of key prudential risk metrics to facilitate the comparison and analysis of the capital positions and risk profiles of local banks. The regulator also proposed to remove disclosure requirements relating to prudential risk metrics for smaller authorised deposit-taking institutions (ADIs). The centralised publication will be used instead to promote transparency and to reduce disclosure requirements for this segment of the banking industry.
The removal of disclosure requirements for small ADIs will take effect in 2023 to align with the new bank capital framework. The disclosure requirements for large banks will take effect from 2024.
“Transparency is important to a well-functioning system,” Deputy Chair John Lonsdale said. “APRA’s proposed disclosure requirements will ensure investors and the community can see how key executives are rewarded, and that consequences are applied where there are poor risk outcomes. The planned update to bank disclosures will also give investors, depositors, and the broader community the information they need to assess the prudential health of individual ADIs and the industry overall.”
The consultation is open until Oct. 7. Visit the APRA website for copies of the discussion papers.