Australian banks must have a plan to deal with negative inte

Australian banks must have a plan to deal with negative interest rates by 2022 - APRA


Paulina Duran
3 minute read
SYDNEY, July 12 (Reuters) - Australia's prudential regulator told banks on Monday they must have a plan to deal with the possibility of zero or negative interest rates by April 2022, after a consultation showed such rates could pose "operational challenges" in some instances.
While the Reserve Bank of Australia has repeatedly said that a negative cash rate in the country is highly unlikely, the Australian Prudential Regulation Authority (APRA) said "it is possible that other interest rates determined in the financial markets could fall to zero or below zero at any time."
APRA is thus asking banks to take "reasonable steps" to prepare for such a scenario and to "at a minimum, develop tactical solutions to implement zero and negative market interest rates and cash rate by 30 April 2022."

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