Australian prudential regulation should be in line with international accounting standards by the end of the year, the industry watchdog says.

The Australian Prudential Regulation Authority (APRA) has unveiled new standards and guidance notes for banks and credit unions and says insurers can expect similar changes in the next seven months.

Chairman John Laker says the changes will bring authorised deposit-taking institutions (ADIs) into line with overseas regulatory systems and financial reporting standards.

“Overall, APRA’s approach to the International Financial Reporting Standards is intended to ensure that the financial position of ADIs continues to be underpinned by adequate levels of high-quality capital,” he said.

Similar changes to the way insurers retain capital will be implemented once consultation of the Stage 2 general insurance reforms has been completed.

The new banking regulations will apply from July 1, and the insurance changes are expected to take effect from the end of the year.