Australian banks must have a plan to deal with negative interest rates by 2022 – APRA
|In its latest report released Monday, the Australian Prudential Regulation Authority (APRA) urged the banks to be prepared for the possibility of zero or negative interest rates by 30 April 2022.
Key takeaways
“it is possible that other interest rates determined in the financial markets could fall to zero or below zero at any time.”
“Tactical solutions are typically shorter-term fixes, involving workarounds on the periphery of existing systems, along with overrides in downstream systems.”
“Insufficient preparation for the possibility of zero and negative interest rates could therefore have an adverse impact on (a bank), its customers and the markets in which it operates.”
Market reaction
AUD/USD is holding the lower ground near 0.7470, down 0.14% on the day, undermined by Sydney’s lockdown extension a broad US dollar bounce.
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