The Reserve Bank has repeatedly said that the prospect of negative interest rates in Australia is highly unlikely. However, the Australian Prudential Regulation Authority (APRA) has advised that it raised the prospect of zero or negative interest rates with the nation’s banks in late 2020, and asked them to ensure that their technology systems would be able to cope with this scenario:
The Australian Prudential Regulation Authority said on Monday it wrote to banks seven months ago asking them to tell the regulator if they would have any issues implementing negative interest rates…
APRA said at the very minimum, banks should “develop tactical solutions” – short-term fixes to create workarounds on existing systems – to implement zero and negative market interest rates and cash rate by April 30, 2022. It wants this done for all products referencing the cash rate or a market interest rate. This includes business lending, residential mortgages, personal loans and credit cards…
