The Australian Prudential Regulation Authority (APRA) has released observations on credit risk provisioning practices for locally incorporated authorised deposit-taking institutions (ADIs).
In a letter to industry released today, APRA wrote to all locally incorporated ADIs that do not apply prescribed provisioning under Prudential Standard APS 220 Credit Risk Management (APS 220) to outline key observations on the application of expected credit loss (ECL) provisioning.
APRA’s observations are consistent with its strategic initiative to modernise the prudential architecture and they aim to provide timely updates to industry on expectations to respond to risks as they emerge.
The letter to industry is available on the APRA website at: Credit risk provisioning practices for locally incorporated authorised deposit-taking institutions.
