Regulatory AlertsAPG 117 Interest Rate Risk in the Banking Book
The Australian Prudential Regulation Authority issued this guide to assist Authorised Deposit-taking Institutions in complying with Prudential Standard APS 117 regarding the management and measurement of interest rate risk in the banking book. The document outlines requirements for establishing robust risk management frameworks, defining board and senior management responsibilities, and implementing comprehensive measurement systems commensurate with an institution's scale and complexity. It further details supervisory expectations for reporting, capital adequacy, and the handling of specific risks such as basis risk and optionality to ensure financial stability.
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