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On Thursday 11 November 2021, APRA announced its proposed new attachment to Prudential Standard APS 220 Credit Risk Management.

While auditing risk culture is still a relatively new concept for most organisations, it’s an area that is receiving increased focus.

The Banking Executive Accountability Regime (BEAR) set out in Part IIAA of the Banking Act 1959, was introduced in February 2018.

APRA has now begun issuing notices to regulated financial institutions advising them to start preparing for CPS 234 tripartite reviews.

Appropriate culture, governance systems and remuneration structures are critical to rebuilding trust in financial institutions and ensuring a resilient financial system. APRA, as the prudential regulator, plays a significant role in this through introducing new standards and its oversight regime.

On 25 March 2019, APRA proposed updating its prudential standard on credit risk with an update to APS 220 Credit Risk Management to capture the full credit life cycle.