Australian Banking Watchdog Tightens Rules for High-Risk Loans

Australian Banking Watchdog Tightens Rules for High-Risk Loans
A for sale sign is displayed outside a home in Sydney, Australia, on April 28, 2016. Brendon Thorne/Getty Images
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The Australian Prudential Regulation Authority (APRA) will now require banks to hold higher capital levels against interest-only loans, which entail higher risk, under its new bank capital framework.

The changes, to come into force on January 2023, are designed to establish “unquestionably strong” Australian standards that align with the internationally agreed Basel III requirements.