Regulatory AlertsAPS 112 Capital Adequacy: Standardised Approach to Credit Risk
APRA issued Prudential Standard APS 112 to require authorised deposit-taking institutions to maintain adequate regulatory capital against credit risk exposures using the standardised approach. The standard mandates the application of specific risk weights and credit conversion factors to on- and off-balance sheet exposures, while permitting capital relief through eligible lenders’ mortgage insurance or credit risk mitigation techniques. It establishes detailed requirements for property exposure risk weighting, internal controls, and the calculation of risk-weighted assets, commencing on 1 July 2025.
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