SYDNEY, June 4 -- Australian Prudential Regulation Authority issued the following media release:
The Australian Prudential Regulation Authority (APRA) has finalised a new, more accessible pathway for banks to become accredited to use the internal ratings-based (IRB) approach to calculate credit risk-weighted assets.
The new pathway has the potential to boost competition while still supporting financial safety by incentivising banks to invest in advanced risk management capabilities. The IRB approach allows banks to better match capital to their actual risk, which can reduce their capital requirements and enable more competitive pricing.
The IRB method is one of two approaches banks can use to calculate risk-weighted assets, which determi...