Yesterday Australia’s treasurer released its
System Inquiry Report. Its recommendations could change how
banks manage regulatory capital in Australia.
The long-awaited report - known as the Murray Report after
the committee’s chairman – is the first
such report in Australia since the 1997
Wallis Inquiry. It was intended to bolster the stability of
Australia’s financial system in the interest of
It could have far-reaching effects for banks, from requiring
them to hold more capital to determining the future of
bail-in-able capital in the jurisdiction. It has also
prompted Australian Prudential Regulatory Authority (Apra) to
consider Basel III’s leverage ratio –
a component of the international regulations that were put on
hold until after these regulations were released.
The Federal Treasury has opened a public consultation that
will close on March 31 2015, but there is also no doubt that,
at some stage, Apra will release...