26 September 2023

APRA releases 2020 Year in Review

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The Australian Prudential Regulation Authority (APRA) has released its 2020 Year in Review, providing a view on the financial environment and detailing its key activities for the year across the banking, insurance and superannuation industries,

Chair of APRA, Wayne Byres said the Review also contained metrics for APRA-regulated industries, including analysis of industry composition, profitability and financial strength.

“COVID-19 swiftly and fundamentally changed the operating environment for the Australian financial system and APRA, as the financial safety regulator,” Mr Byres said.

“The health crisis brought with it an economic crisis and subsequent economic contraction that was, at one point, more severe than anything seen since the Great Depression,” he said.

Mr Byres said the strength of Australia’s financial system allowed APRA-regulated financial institutions (authorised deposit taking institutions, insurers and superannuation funds) to stand up to the impact of COVID-19, both financially and operationally.

He said the onset of the pandemic required APRA to reset and reshape its priorities and activities.

“At the start of 2020, APRA had set out a wide-ranging and ambitious agenda across banking, insurance and superannuation,” he said.

“The pandemic, however, required a rapid reassessment of those priorities and a redeployment of resources to focus on the core financial and operational resilience of the sector.”

Mr Byres said APRA provided a range of regulatory concessions and took steps to reduce regulatory burden; supported broader Government stimulus measures and policy responses; and collected and published additional data to enable a transparent and objective view of the impact and success of various measures.

He said APRA also provided guidance to institutions on capital management, particularly in relation to limiting the payment of dividends at a time of heightened uncertainty.

“In November, APRA recommenced some of its agenda originally planned for 2020, re-engaging on important prudential policy issues that were incomplete,” the Chair of APRA said.

“These important reforms will not directly play a role in helping manage this crisis, but they will certainly be part of the foundation for dealing with the next one – whenever that may be.”

Mr Byres said APRA’s strategic priorities would continue to be reviewed to ensure the organisation remained responsive to risks and vulnerabilities in the financial system that could impact financial institutions and the broader Australian community.

APRA’s 47-page 2020 Year in Review can be accessed at this PS News link.

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