APRA dials back TLAC-equivalent requirement but sticks to tier-two as instrument of choice
The Australian Prudential Regulation Authority (APRA) has reduced the incremental total-capital uplift initially required of Australia’s big-four banks under its total loss-absorbing capacity (TLAC) equivalence regime. The regulator believes it should be possible for Australian banks to fund a smaller initial uplift with tier-two securities rather than via a new asset class.
Mutual sector consolidation to bring opportunities for capital markets
New analysis from S&P Global Ratings (S&P) predicts further consolidation within the mutual sector. This consolidation should see greater capital-markets activity from the sector thanks to greater entity scale and expansion of the range of funding tools available to mutual banks.
Read more: Mutual sector consolidation to bring opportunities for capital markets
Dissecting the EU taxonomy
On 18 June, the EU technical expert group (TEG) subgroup on taxonomy published the Taxonomy Technical Report. The taxonomy is expected to become the world’s foremost roadmap for sustainable investment, with a key definitional role in the green-bond market.
Submissions reflect concern on RBNZ proposals
The Reserve Bank of New Zealand (RBNZ) has published a summary of the 161 submissions it received on its proposals to increase the capital requirements of locally incorporated banks. Bank and financial-market responses to the consultation mirror market commentary on the topic but martial the industry response to proposals most in the sector see as onerous.
HQLA revision already moving the dial for semi-government sector
Bank balance sheets doubled their participation in New South Wales Treasury Corporation (TCorp)’s latest syndication. Market participants say this is no surprise given a recent tweak to Australia's liquid-assets regime for major banks – adding that the changes should drive further incremental bank demand to local high-grade issuers.