The Australian Prudential Regulation Authority (APRA) is also hoping to prompt some discussion, this time in the insurance and risk management industries.

It has released its proposed approach to regulating market risk under the revised Basel II framework for international capital adequacy.

Chairman John Laker says the reforms aim to bring Australia’s capital requirements for authorised deposit-taking institutions (ADIs) in line with the Bank for International Settlements revised standards of 2006.

The self-described “bank for central banks”, based in Basel, Switzerland, believes the new rules will encourage ADIs (including insurers) to better identify the risks they face and develop strategies for managing them.

APRA released the discussion paper on August 2. It follows on from a July 31 paper addressing issues raised in a previous consultation on its standardised approaches to credit risk and operational risk under Basel II.

Dr Laker says these strategies better align the regulatory capital requirements with the risk profile of an ADI.

National Insurance Brokers Association regulation consultant John Hanks says there is little in the new standards to concern Australian business. He says there are a lot of different standards proclaimed for different risk profiles, but “it won’t create a lot of ripple”.