SYDNEY, Oct. 23 -- Australian Prudential Regulation Authority issued the following media release:
The Australian Prudential Regulation Authority (APRA) has proposed a simpler, clearer and more streamlined pathway for banks to become accredited to use the internal ratings-based (IRB) approach to calculating credit risk-weighted assets.
The IRB method is one of two approaches banks can use to calculate risk-weighted assets, which determines the amount of regulatory capital they need to hold for credit risk.1
While the vast majority of banks use the standardised approach, APRA has approved six of the largest banks to use the IRB approach.2
The IRB approach can provide a small financial benefit to banks by marginally reducing their capital ...