The Australian Prudential Regulation Authority (APRA) has released details of proposed changes to capital requirements for authorised deposit-taking institutions (ADIs) (draft Prudential Standards APS 110 Capital Adequacy and APS 111 Capital Adequacy: Measurement of Capital) and general insurers (GIs) and a discussion paper.

The proposed changes arise from the adoption of the
Basel II Capital Framework in Australia, finalising APRA’s treatment of
conglomerate groups containing one or more locally incorporated ADIs
and responses to accounting and market developments since the standards
were last updated.

APRA proposes to
finalise and issue the ADI prudential standards in late 2007. They will
have effect from 1 January 2008.
Changes to capital requirements for GIs will be implemented in 2008.