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APRA lifts bank capital buffers to protect savers

James Eyers
James EyersSenior Reporter

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The prudential regulator will strengthen its ability to safely resolve a future banking crisis, calling for banks to lift their “total loss absorbing capital” buffers by half to 4.5 per cent, to ensure depositors are protected should a bank looks like it might fail.

Bank debt issuance will rise on the back of the higher buffer, announced by the prudential regulator on Thursday morning. Banks will have four years to build the reserves, with the new settings coming into force on January 1, 2026.

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James Eyers writes on banking, payments and fintech. He is a former legal and investment banking editor at the AFR, has degrees in commerce and law from UNSW, and is co-author of Buy now, pay later: The extraordinary story of Afterpay Connect with James on Twitter. Email James at jeyers@afr.com.au

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    Original URL: https://www.afr.com/companies/financial-services/apra-lifts-bank-capital-buffers-that-protect-from-financial-crisis-20211202-p59e6u