Advertisement
Back in August, the Australian Prudential Regulatory Authority (APRA) issued a media release reaffirming that it would raise the banks’ average risk-weight on residential mortgages to 25%, as agreed following the Final Report of the Murray Financial System Inquiry (FSI).
Under the Basel Capital Adequacy Framework’s Advanced Internal Ratings-Based (IRB) approach, the major banks and Macquarie are permitted to use their own internal models to determine their risk-weighting and capital requirements.
The full text of this article is available to MacroBusiness subscribers
Cancel at any time through our billing provider, Stripe
About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.