Australia’s prudential regulator has purportedly told banks to improve reporting on crypto assets and provide daily updates.
Australia’s prudential regulator has purportedly questioned local banks to report on cryptocurrency transactions amid the ongoing contagion of Silicon Valley Bank’s (SVB) collapse.
The Australian Prudential Regulation Authority (APRA) has started asking banks to declare their exposures to startups and crypto-related companies, the Australian Financial Review reported on March 21.
The regulator has ordered banks to improve their reporting on crypto assets and provide daily updates to the APRA, the Financial Review notes, citing three people familiar with the matter. The agency is aiming to obtain further information and insight into banking exposures into crypto as well as associated threats, the sources said.
The new measures are apparently part of the APRA’s increased supervision of the banking sector in the aftermath of recent massive collapses in the global banking system. On March 19, UBS Group agreed to buy its ailing competitor Credit Suisse for $3.2 billion after the latter collapsed over the weekend. The takeover became one of the latest failures in the banking industry following the collapses of SVB and Silvergate.
Barrenjoey analyst Jonathan Mott reportedly told clients in a note that the situation “ remains stable ” for Australian banks but warned confidence could be fast disrupted, putting pressure on bank margins.
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“ Our channel checks indicate deposits aren't being withdrawn from smaller institutions in any size, and capital and liquidity buffers are strong, ” Mott told, adding:
“But this is a crisis of confidence and credit spreads and cost of capital will continue to rise. At a minimum, this will add to the margin pressure the banks are facing, while credit quality will continue to deteriorate.”
The news comes shortly after the Australian Banking Association launched a cost of living inquiry to study the impact of the COVID-19 pandemic and geopolitical tensions on Australians. The inquiry followed an analysis of the rising inflation suggesting that further than 186 banks in the United States are at threat of such shutdown if depositors decide to withdraw all funds.
(HELEN PARTZ, Cointelegraph, 2023)