Stress test activities step up
(19 December 2011 — Australia) The Australian Prudential Regulation Authority (APRA) allegedly gave the country’s banks one week to model the impact of a worst-case scenario, a report that has been rejected by ANZ.
The Australian Financial Review reported the test included modeling of a contraction in gross domestic product, unemployment rate climbing to 12 percent, as well as a 30 percent decline in house prices and a 40 percent drop in commercial property values.
ANZ said the claim was "not correct" with the bank’s chairman John Morschel telling shareholders at the bank’s annual meeting that he was not aware of any requests from APRA to complete a review on that basis within a week.
APRA declined to comment, but it is widely known the authority has been stepping up its stress-testing activities, holding major as well as targeted tests.
The parameters of a major stress test that APRA conducted this time last year included an unemployment rate rising to 11 percent and 25 percent drop in house prices and a 45 percent drop in commercial property prices through an economic cycle.
In October APRA chairman John Laker said the regulator was pushing ahead with tests of the crisis recovery plans being developed by the nation's biggest banks to see if they can survive a major economic shock.
The results of this test are scheduled to be finalised during the first quarter of 2012.
ANZ said the claim was "not correct" with the bank’s chairman John Morschel telling shareholders at the bank’s annual meeting that he was not aware of any requests from APRA to complete a review on that basis within a week.
APRA declined to comment, but it is widely known the authority has been stepping up its stress-testing activities, holding major as well as targeted tests.
The parameters of a major stress test that APRA conducted this time last year included an unemployment rate rising to 11 percent and 25 percent drop in house prices and a 45 percent drop in commercial property prices through an economic cycle.
In October APRA chairman John Laker said the regulator was pushing ahead with tests of the crisis recovery plans being developed by the nation's biggest banks to see if they can survive a major economic shock.
The results of this test are scheduled to be finalised during the first quarter of 2012.
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