The Australian Prudential Regulation Authority (APRA) has released a discussion paper and draft prudential standard (APS 330) setting
out its proposed approach to market disclosure under the new Basel II
capital adequacy regime, known as the Basel II Framework.

The approach applies to all locally incorporated authorised deposit-taking institutions (ADIs) in Australia.

Under APRA’s proposed approach, all
locally incorporated ADIs, including foreign‑owned bank subsidiaries,
will be required to disclose publicly some basic quantitative
information on their capital adequacy and credit risk exposures. This
information is already provided to APRA on a quarterly basis. APRA is
proposing that these disclosures be made in at least one location,
generally on an ADI’s website.

Australian-owned ADIs that have
APRA’s approval to use the more advanced Basel II approaches will be
required to disclose publicly more detailed qualitative and
quantitative information on their risk management practices and capital
adequacy.

APRA’s market disclosure proposals form part of the
Basel II capital adequacy regime for ADIs that will come into force on
1 January 2008. The full suite of Basel II prudential standards is
expected to be finalised in late 2007.

Comments on the
discussion paper and draft Prudential Standard APS 330 Capital
Adequacy: Market Disclosure are invited by 13 July 2007