New rules governing the amount of money banks will need to keep in reserve should not significantly impact interest rates, Treasurer Scott Morrison says.
The Australian Prudential Regulation Authority on Wednesday announced new "unquestionably strong" minimal capital requirements for retail banks to be in place by January 2020.
To achieve this level, the prudential watchdog says the big four banks will need to raise minimum capital requirements by the equivalent of 100 basis points above their 2016 levels.
For other authorised deposit-taking institutions the increase is around 50 basis points.
"It is imperative that our banking system is unquestionably strong as it underpins some of the biggest decisions we make, including buying a home or starting a business," Mr Morrison said in a statement.
Mr Morrison said the increased requirements would put Australia's capital framework at the forefront of international best practice and help ensure the financial system can endure future external shocks.
He believes the banks are well placed to meet these new benchmarks by the 2020 deadline.
"Today's announcement should not significantly impact loan pricing or consumers' ability to access finance," the treasurer said.
Share
