Macquarie Bank has seen its liquidity and operational risk capital requirements increased by the Australian Prudential Regulation Authority (APRA) after failing to meet requirements.
The enforcement action related to the incorrect treatment of a specific intra-group funding arrangement for the purpose of calculating capital as well as breaches of reporting standards on liquidity between 2018-2020.
APRA said that, while the breaches were historical, they raised “serious questions” about the bank’s practices. It said it “cannot rule out” further action in the future if more information came to light.
As a consequence of the breaches, APRA required:
APRA deputy chair, John Lonsdale, said: “APRA’s legally-binding prudential and reporting standards play an essential role in enabling APRA to adequately monitor risks to financial safety and stability. For one of the country’s largest financial institutions to have committed breaches of this nature is disappointing and unacceptable.
“Alongside the enforcement actions, APRA will subject Macquarie Bank to intensified supervision to address the bank’s persistent difficulties in complying with its prudential obligations. We cannot rule out further action as more information comes to light about the root causes of these breaches.”
The increases would take effect today.
While the Financial Advice Association Australia said it supports a performance testing regime “in principle”, it holds reservations about expanding this scope to retirement products.
In a Senate submission, the Financial Services Council said super funds should be able to nudge members on engaging with their super and has cautioned against default placements.
The Joint Associations Working Group, which counts FSC in its ranks, has issued an urgent warning to the government.
Senator Jane Hume will join the speaker lineup at the inaugural Australian Wealth Management Summit.
Add new comment