Australia: Financial Sector Assessment Program-Technical Note-Bank Resolution and Crisis Management
IMF Staff Country Reports, February 21, 2019
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- Australia: Financial Sector Assessment Program-Technical Note-Bank Resolution and Crisis Management
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Bibliographic details
- Published: February 21, 2019
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484398845.002
Analysis and scope
- Analyzes existing legal and institutional frameworks in Australia, including coordination arrangements.
- Focuses on crisis preparedness, including recovery and resolution planning and the Reserve Bank of Australia’s (RBA) lender-of-last-resort functions.
- Highlights that Australia has a well-established framework for financial stability, surveillance and policy formulation.
- Notes that the resolution regime for financial institutions has been significantly enhanced since the financial crisis.
Findings on recovery and resolution planning
- Australian Prudential Regulation Authority (APRA) has made progress in developing recovery planning requirements for the banking industry, extending these from large to medium sized and smaller banks.
- Identified need to better integrate recovery planning within the risk management framework and operational testing exercises.
- Identified need to significantly enhance APRA’s work on resolution planning, particularly for the largest banks.
RBA lender-of-last-resort and crisis preparedness
- The technical note examines the Reserve Bank of Australia’s (RBA) lender-of-last-resort functions as part of crisis preparedness and management.
Policy recommendations
- Recommends that the Australian authorities should introduce an ex-ante funded deposit insurance scheme, based on best international practice.
Subject areas and keywords
- Subject: Bank resolution, Bank resolution framework, Banking, Crisis management, Crisis resolution, Financial crises
- Keywords (as provided): APRA direction power, APRA power, APRA's risk assessment model, Australia and New Zealand, bank distress, Bank resolution, Bank resolution framework, banking sector, bridge bank, CR, Crisis management, Crisis resolution, enforcement function, financial system, Global, holding company, introduced bank levy, ISCR, particular focus, problem bank, R&E team, resolution framework, resolution modality, risk management framework, transfer power
Content in this bundle
- 1ausea2019001