• Regulatory focus on liquidity reporting continues

As you may have seen, The Australian Prudential Regulation Authority (APRA) last week released an announcement on a proposal to publicise liquidity statistics for authorised deposit-taking institutions (ADIs).

While we don’t see this resulting in additional workload for ADIs there are a few observations to note from the proposed changes:

  • Form ARF 210 from which the liquidity data is to be sourced is not currently subject to full audit under APS 310 reporting. This may highlight the need for ADI’s to consider a review of the integrity of the data inputs to the liquidity forms on the basis that increased scrutiny is likely if this information is made publicly available. We know that data quality and integrity is a particular focus of APRA at present and this includes the accuracy of data sources for the D2A forms.
  • The release of this consultation package along with the revisions recently proposed to securitisation frameworks continues to highlight the ongoing focus of APRA on strengthening the ADI sector. We can expect to see more in this space in the foreseeable future.
  • The publication of this liquidity data may allow for greater transparency and further benchmarking within the ADI sector, particularly where consolidation continues at an accelerated pace. However, similar to existing statistics publications it is not expected to identify ADIs by name.

 

Click here for the full APRA announcement.