APRA lessens liquidity checks
In one measure of the improved liquidity profile of banks, and of improved liquidity management practices, APRA has redeployed a special team set up to more closely monitor this aspect of bank operations.John Laker, chair of the Australian Prudential Regulation Authority, said in a speech yesterday that since the global financial crisis began in September 2008 "the most intense focus of APRA's supervisory activities" related to management by deposit-taking institutions of their liquidity and funding. APRA obtained more frequent reporting from deposit-taking entities and "forward-looking funding plans from a range of ADIs".While Laker did not mention it, APRA also leaned on ADIs to operate at higher liquidity ratios, something many of them are keen to now unwind (and, in some cases, have begun to do so).Laker said "the improving tone of global credit markets in 2009" enabled the regulator to "stand this team down and to reallocate our priorities to ADI funding plans."Funding plans had, he noted, "been improving in quality since our initial requests."