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APRA admits capital charge for Australian D-SIBs

29 November 2012 5:44PM
The Australian Prudential Regulatory Authority has finally confirmed that it will impose additional capital requirements on Australia's biggest banks.Speaking at an Australian Financial Review conference in Sydney yesterday, APRA's chairman, John Laker, was reported as saying APRA would apply tougher capital requirements to domestic systemically important banks, or D-SIBs. An APRA spokesman later confirmed the comments.The IMF's latest Financial System Stability Assessment of Australia, released earlier this month, showed it would be difficult for the Big Four to avoid be classified as D-SIBs. The Four have a higher share of total domestic banking assets than the top four banks in any other developed nation.Australia's D-SIBs are certain to include all of the Big Four; some analysts think Macquarie Bank might also be included. Laker did not specify how many D-SIBs APRA would identify.He also avoided commenting on how much extra capital the D-SIBs would have to carry. The final figure is expected to be around one per cent. Most analysts believe the Big Four, which are already well-capitalised, will take the requirement in their stride.Laker also said Australia would stick with the agreed January 1, 2013 start date for implementing the Basel III rules. The US Federal Reserve has said it will not enforce this start date, which has led some European bankers to argue Europe should postpone its start date as well.

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