The Australian Prudential Regulation Authority (APRA) has released an information paper that explains how the capital adequacy rules for housing lending work and explores two key questions:
- how does APRA ensure that capital requirements for housing lending are sufficient to withstand losses through the cycle?; and
- how does APRA ensure that the differences between internal ratings-based and standardised capital requirements are appropriate, and limit impacts on competition in the Australian banking system?
The full information paper can be found on the APRA website: Demystifying credit risk capital requirements for housing loans.
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