What to expect from APRA’s Basel III liquidity reforms

Author: | Published: 30 Nov 2011

Lawyers in Australia have welcomed the Australian Prudential Regulation Authority’s (Apra) consultation package on the implementation of Basel III liquidity and capital reforms.

The draft Prudential Standard APS 210 Liquidity paper, released this month, details the regulator’s plans to employ Basel III’s global liquidity standards, as outlined in the Basel Committee on Banking Supervision’s (BCBS) September 2008 Principles for Sound Liquidity Risk Management and Supervision and in its December 2010 Basel III - International framework for liquidity risk measurement, standards and monitoring.

They stipulate APRA’s intentions to follow BCBS’s timetable and apply the 30-day Liquidity Coverage Ratio (LCR) requirements, designed to address short-term liquidity shock, from January 1 2015, and Net Stable Funding Ratio (NSFR) standards, created to encourage longer-term stable funding, from January...