The Reserve Bank of Australia’s (RBA) assistant governor, Michele Bullock, has praised the success of measures aimed at increasing the capital ratios of Australian banks. Bullock notes that the four major banks are close to achieving the Australian Prudential Regulation Authority’s (APRA) “unquestionably strong” capital benchmark, claiming the banks’ capital ratios have increased from 8% to 12% since 2013, when measured on a risk-weighted basis. From The Australian:
“[New] measures have resulted in a significant increase in the amount of capital held by the Australian banking system over the past decade,” Ms Bullock said. “The transition to a higher level of capital is now coming to an end,” she added…
When measured on a risk-weighted basis, a popular method that allows banks to ignore swathes of their assets when calculating their minimum equity requirements, the major banks’ capital ratio has increased from 8 per cent to 12 per cent since 2013, when the Basel III rollout began…
