Regulatory AlertsAPG 117 Capital Adequacy: Interest Rate Risk in the Banking Book
The Australian Prudential Regulation Authority issued APG 117 to provide guidance on prudent practices for managing and measuring interest rate risk in the banking book (IRRBB). The guide assists Authorised Deposit-taking Institutions in complying with Prudential Standard APS 117 and CPS 220 by outlining requirements for risk management frameworks, governance structures, and capital adequacy. It details specific expectations for Board oversight, senior management responsibilities, and the measurement of risks such as basis, optionality, and yield curve risk to ensure sufficient regulatory capital is held.
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