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Impact of the Financial Crisis and Lessons Learnt

Impact of the Financial Crisis and Lessons Learnt. Helen Rowell Regional Information Session, Cape Town 5 March 2010. Impact of the Financial Crisis and Lessons Learnt. Impact of the GFC in Australia Emerging issues during the GFC Lessons learnt APRA’s focus for 2010 and beyond.

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Impact of the Financial Crisis and Lessons Learnt

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  1. Impact of the Financial Crisis and Lessons Learnt Helen Rowell Regional Information Session, Cape Town 5 March 2010

  2. Impact of the Financial Crisis and Lessons Learnt • Impact of the GFC in Australia • Emerging issues during the GFC • Lessons learnt • APRA’s focus for 2010 and beyond Impact of the Financial Crisis and Lessons Learnt Helen Rowell

  3. Impact of the GFC in Australia • Australian financial sector has weathered the GFC well • Life and general insurers remain well capitalised • Volatility of balance sheets in late 2008 and early 2009 has eased • Financial results remain under pressure but still generally sound Impact of the Financial Crisis and Lessons Learnt Helen Rowell

  4. Emerging issues during the GFC • Volatile/deteriorating solvency positions – all industries • Funding & liquidity constraints – primarily banking & wealth management (pensions) • Contagion risks – particularly impact of unregulated entities • Balancing capital and funding/liquidity needs of all group members • Constraints on access to additional capital & funding for branches and subs Impact of the Financial Crisis and Lessons Learnt Helen Rowell

  5. Lessons learnt • Need to be better prepared for speed of change – APRA and entities • Having the right information to assess and an efficient decision process is key • Need for regular and effective communication with entities and other regulators • Weakness in risk identification & management • Stress testing not stressful enough Impact of the Financial Crisis and Lessons Learnt Helen Rowell

  6. APRA’s focus for 2010 and beyond • For insurers, mostly focused on solvency and underlying financial performance • Additional focus on stress testing – better understand impact of different drivers • Heightened and proactive supervision • Increased liaison with other regulators Impact of the Financial Crisis and Lessons Learnt Helen Rowell

  7. APRA’s focus for 2010 and beyond • Identification of top industry risks and action plans to address • Review of risk and capital management processes - Internal Capital Adequacy Assessment Process • No material regulatory changes from GFC – but some policy projects in train Impact of the Financial Crisis and Lessons Learnt Helen Rowell

  8. Impact of the Financial Crisis and Lessons Learnt Thank You! Any Questions? Impact of the Financial Crisis and Lessons Learnt Helen Rowell

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