Regulatory AlertsAPG 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk
The Australian Prudential Regulation Authority issued Prudential Practice Guide APG 113 to provide guidance to authorised deposit-taking institutions on complying with APS 113 requirements for using the internal ratings-based approach to credit risk. The document outlines prudent practices for governance, oversight, and the management of rating systems, including model risk policies and independent review processes. It further details the classification of credit exposures into specific asset classes such as corporate, sovereign, financial institution, and retail, with particular emphasis on income-producing real estate and small-to-medium enterprise criteria.
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