Trans-Tasman Business Circle private roundtable luncheon

The Trans - Tasman Business Circle is a strategic growth partner for the region’s leading organisations in the private and public sector. APRA Chair Wayne Byres will address the Trans-Tasman Business Circle private roundtable luncheon in Sydney, Australia.

APRA publishes Chair Wayne Byres’ speech to Trans-Tasman Business Circle

The Australian Prudential Regulation Authority (APRA) has published a speech delivered this afternoon by Chair Wayne Byres to a meeting organised by the Trans-Tasman Business Circle.

In “Flattening the curve”, Mr Byres provided an update on how APRA is seeking to support the soundness and stability of Australia’s financial system during the biggest and most sudden economic contraction since the 1930s.

Mr Byres comments included:

• “We cannot avoid or hide from the long-run impact of a shock, but macro- and microprudential measures can assist in making the adjustment process more orderly and limit unnecessary costs. In the same way that governments and health professionals have sought to flatten the curve of new infections, the challenge from an economic and financial perspective is to find a way to reduce the speed and depth of the contraction, as doing so is also likely to minimise its longer-term damage.”
   
• “The approach we adopted [to loan deferrals] sought to strike a balance. By extending the concessionary approach until the end of March next year, we sought to remove regulatory disincentives to banks offering additional support beyond the end of September. At the same time, we have made clear that banks should only offer further repayment deferrals in cases where they have some degree of confidence the borrower could return their loan to performing status.”
   
• “We will be updating our capital management guidance next week. We will modify the guidance, and extend it for the remainder of this calendar year, shifting from the immediate, short-term emergency response in April to a setting with a somewhat longer-term outlook. Our goal is to … ensure capital management practices clearly have regard to the continuing uncertainty in outlook, that stress scenarios can be overcome without having to resort to cutting business activity, and that regulated firms are not unduly constrained from raising capital if and when needed.”
   
• “I want to be clear we have no intention of creating a capital cliff-face that banks or insurers need to rapidly climb. As we have done in the past, our approach will be to allow banks and insurers to rebuild (to the extent any rebuild is even required) in an orderly manner, and in a way that doesn’t unnecessarily constrain activity or economic growth.”

A full copy of the speech is available on the APRA website.
 

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