APRA to investigate all ADIs for breaches
TheAustralian Prudential Regulation Authority(APRA) has announced it will review the risk management practices of all authorised deposit-taking institutions (ADIs) with treasury functions.
The review will begin with the peak regulator undertaking a review of National Australia Bank’s risk management controls within its treasury division in light of this week’s highly publicised $180 million losses.
APRA will investigate the unauthorised trading in foreign exchange options activities that led to the losses and whether the Bank’s existing escalation procedures are effective.
The peak regulator will also look at the group’s controls in its treasury front and back offices, along with possible weaknesses in the design and implementation of the NAB’s internal control systems - including market risk management.
“From a prudential perspective, APRA has to ensure that any breakdown of controls and processes in this instance has been properly identified and that appropriate action has been taken by the institution in question to rectify the matter,” APRA’s deputy chairman Ross Jones says.
“APRA is in constant dialogue with the ADIs it regulates and does not have any specific concerns about individual institutions or the industry in general. However, both APRA and industry recognise the importance of reassuring the community and the industry review is part of that process,” Jones says.
Recommended for you
The “experiment” away from vertical integration has been a mistake, according to Clime’s Michael Baragwanath, and Clime is positioning to benefit via advice and fund manager acquisitions.
JP Morgan Asset Management has identified Australia as an “emerging growth market” as it seeks to double its assets under management in the Asia-Pacific region in the next five years.
Australian Ethical funds under management were $14.3 billion at the end of September, with its investment division seeing inflows return after outflows in the previous quarter.
Record flows into iShares ETFs helped BlackRock’s assets under management reach US$13.5 trillion in the third quarter, but it reported outflows from the APAC region.
