Therese McCarthy Hockey (pictured), speaking at FINSIA’s The Regulators event, underscored APRA’s commitment to maintaining a stable financial system amid global uncertainties.
With APRA’s strategic plan, McCarthy Hockey stressed, “Australians could be assured of the safety of their bank deposits, the security of their superannuation savings or the ability of insurers to cover their claims.”
In 2025, APRA will launch its first system-wide stress test, the System Risk Stress Test.
This initiative will focus on how banks and super funds interact under hypothetical financial disruptions. It aims to examine the effects of liquidity stress between these industries, providing critical insights into financial resilience.
Acknowledging recent cybersecurity incidents, McCarthy Hockey pointed to APRA’s new Operational Risk Management standard, set to take effect by July.
APRA will monitor compliance closely to help firms proactively address operational threats, from cyber risks to supply chain disruptions.
With climate change increasingly impacting insurance, APRA is leading a Climate Vulnerability Assessment on Australia’s largest household insurers.
This initiative aims to understand how climate risks could affect insurance affordability, focusing on trends through 2050.
To align APRA’s governance requirements with modern practices, a review of prudential standards for governance will soon commence. The review will target areas like board performance, integrity, and accountability, reflecting evolving market expectations and international benchmarks.
McCarthy Hockey outlined sector-specific initiatives: revisiting bank liquidity requirements post-Silicon Valley Bank collapse, enhancing superannuation trustees’ financial scrutiny, and tackling the “insurance protection gap” to improve affordability.
McCarthy Hockey closed by reinforcing APRA’s role in guiding Australia’s financial sector safely through a challenging environment, affirming, “In these uncertain times, we believe APRA’s strategic plan is the right one.”
Read the full speech on the APRA website.
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