The Australian Prudential Regulation Authority is "unlikely to make keeping [banks' capital ratios] in the top quartile a central target of its prudential policy," as recommended by the Financial System Inquiry, columnist David Uren reported in
The Australian.
The prudential regulator "is expected to rely on new global curbs on the use by the big banks of internal models for calculating their risk capital to deliver a short-term increase in bank capital ratios than mandating a further across-the-board increase," the newspaper reported.
APRA is working on an analysis of the relative capital position of Australian banks, Uren said, and aim to use this work "as a secondary check on Australian banks' standing conducted every three or four years rather than as an operational target for the regulator."
APRA is also "likely to be cautious about tinkering with the models used by the big banks to establish a risk-weighting for their assets in order to level the playing field with the smaller banks," as urged by the inquiry, the newspaper's columnist said.