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2026-05-28 18:34:26
[Australian Prudential Regulation Authority Maintains Macroprudential Policy Amid High Uncertainty] ⑴ Following its latest assessment, the Australian Prudential Regulation Authority (APRA) confirmed that it will maintain its existing macroprudential policy settings. The mortgage servicing capacity buffer remains at 3 percentage points, the countercyclical capital buffer remains at 1% of risk-weighted assets, and the high debt-to-income ratio (DTI) loan cap remains unchanged at 20%. ⑵ APRA noted that the operating environment remains highly uncertain, and shifts in the economic outlook are impacting financial stability risks. Household debt levels remain high, and while housing credit growth was strong in the first quarter, signs of slowing have emerged. Household and business cash flow pressures have increased due to inflation and rising interest rates, but the non-performing loan ratio remains low. ⑶ High-risk mortgage lending is under control, and lending standards are generally sound. High DTI loans remain well below the APRA-set cap, therefore this cap does not restrict overall bank lending. The Chairman stated that since the last assessment, interest rates have risen against a backdrop of high inflation, and the Middle East conflict has exacerbated cost pressures on households and businesses by pushing up oil prices. ⑷ APRA believes the banking system is well-capitalized and resilient enough to withstand a significant deterioration in economic conditions. The regulator will remain vigilant, monitoring for any early signs of risk that could negatively impact financial stability, and will adjust macroprudential policy settings as necessary. The agency currently oversees financial institutions holding A$9.8 trillion in assets.
