HomeView 2017 Media ReleasesCOBA welcomes ‘unquestionably strong’ capital announcement

COBA welcomes confirmation today that the customer owned banking sector largely already meets ‘unquestionably strong’ capital ratios and that the major banks have some catching up to do.

COBA welcomes confirmation today that the customer owned banking sector largely already meets ‘unquestionably strong’ capital ratios and that the major banks have some catching up to do.

APRA today announced its assessment of the additional capital required for the Australian banking sector to have capital ratios that are considered ‘unquestionably strong’.

“This was the number one recommendation of the Financial System Inquiry and is designed to improve the resilience of the banking sector,” said COBA’s Director of Policy, Luke Lawler.

“While major banks will be required to raise minimum capital requirements by the equivalent of around 150 basis points, APRA says most of the smallest ADIs, many of whom are mutually owned, already have very high capital ratios.

“We note APRA’s observation that it expects that little or no increase in actual capital may be required for the vast bulk of these ADIs.

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“The Government’s response to the Financial System Inquiry said the resilience measures will reduce the advantages the larger banks have over their smaller counterparts, increasing competition and leading to better outcomes for consumers.

“It is encouraging to see progress on implementation of these resilience measures. APRA noted in today’s announcement that by 2020, five years would have elapsed since the release of the final FSI report, and four years since the Government’s response.

“We look forward to seeing APRA’s discussion paper due out later this year on new capital settings for mortgages and further steps to a more level playing field in banking.”

For more information please contact:
Luke Lawler, Director - Policy, COBA
0418 213 025, This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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