Govt focuses BEAR on big banks
The Federal Government has decided to give small and medium-sized banks an extra 12 months to comply with the Bank Executive Accountability Regime (BEAR), but the big banks will need to be ready to comply by 1 July, this year.
The Government’s new time-table for implementation of the BEAR was announced by the Treasurer, Scott Morrison on Friday with the Government making it clear that it is was the big banks, rather than the smaller institutions, which were squarely in its sights.
As well as being subjected to the regime a year later than their large counterparts, smaller banks will also be granted other benefits including the deferral of variable remuneration and the maximum civil penalties.
Morrison said that for large authorised deposit-taking institutions (ADIs), the BEAR would commence on 1 July, 2018, while for small and medium ADIs, the regime would commence on 1 July, 2019, allowing them more time to comply.
“Small and medium ADIs do not have the same operational resources as large ADIs, so it is appropriate to provide these entities more time to adapt to the new regime,” he said. “Other elements that will apply differently, depending on ADI’s size, include the deferral of variable remuneration and the maximum civil penalties.”
The Government has sought stakeholder feedback on the changes, with the consultation period closing on 20 April.
Under the draft legislative instrument, a small ADI would have less than or equal to $10 billion on a three year average of total resident assets; a medium ADI would have between $10 billion and $100 billion on a three year average of total resident assets; and a large ADI would be any ADI with greater than or equal to $100 billion on a three year average of total resident assets.
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