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APRA releases final BASEL III liquidity reforms

A big moment for anyone involved in managing the liquidity of Australian banks.

The Australian Prudential Regulation Authority (APRA) today released its final position on implementation of the main elements of the Basel III liquidity reforms for authorised deposit-taking institutions (ADIs) in Australia, linked here.

This position is provided in a response to submissions paper, which sets out the main issues raised in submissions on APRA’s discussion paper released in May 2013. Accompanying the response paper is Prudential Standard APS 210 Liquidity andPrudential Practice Guide APG 210 Liquidity, which come into force on 1 January 2014.

The Basel III liquidity reforms involve two new quantitative measures ? a 30-day Liquidity Coverage Ratio (LCR) to address an acute stress scenario and a Net Stable Funding Ratio (NSFR) to encourage longer-term funding resilience. These requirements will apply to the larger, more complex ADIs.

The LCR will become effective from 1 January 2015. The Basel Committee on Banking Supervision (Basel Committee) has yet to finalise the rules text for the NSFR; once it has done so, APRA will consult on the implementation of this measure in Australia. The NSFR will become effective from 1 January 2018.

 

  •   21 December 2013
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