The Australian Prudential Regulation Authority (APRA) has flagged that it would scale back much of its routine supervisory activities in the event of a pandemic such as bird flu and intensify its monitoring of regulated institutions.
The regulator’s approach was outlined in a presentation delivered by APRA general manager David Lewis at a Business Continuity Conference late last month.
Lewis said that while the regulator was not a transactions-based business, it nonetheless faced a challenge in maintaining its ability to respond decisively “on those rare occasions when one of our regulated institutions gets into difficulty”.
“However, under a pandemic scenario, just at the time when we will be called upon to carry out one of our most important tasks, we will be operating under resource handicaps of our own,” he said.
“In any system-wide crisis, APRA would scale back much of its routine supervisory activities,” Lewis said. “In its place, APRA will look to intensify its monitoring of regulated institutions. This could include weekly (or even daily) monitoring of key economic signals (such as cash inflows and outflows).”
He said that, obviously, regulated institutions would be expected to keep APRA up to date on issues affecting their financial condition and report any material disruptions to their business.
