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Banking and finance institutions need to ensure the value of their assets are realistic and to prepare for a difficult year ahead.
Speaking at the Senate estimates hearing last night, Australian Prudential Regulatory Authority (APRA) Chairman John Laker revealed he had requested detailed plans from institutions outlining how they intended to finance operations this year – warning the next 12 months would require “very careful management”, reports The Australian.
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“In this uncertain world there is little margin for error,” Mr Laker said.
“We certainly do not want our institutions to ignore the reality that markets have moved a long way from prices they may have been hoping to get for assets six or nine months ago.”
Mr Laker said that APRA was confident in Australian institutions’ ability to weather current uncertainties but said the regulator has adopted a “heightened state of alert” and is monitoring the sector intensely.
Published: 22-02-08
