Australia’s Byres: Banks' capital buffers expected to fall over coming year

Wayne Byres, Chairman of the Australian Prudential Regulatory Authority (APRA) said on Thursday, the country’s banks’ are likely to see a fall in their capital buffers over the coming year, as the coronavirus pandemic has cost a lot of jobs and increase in loan losses.

Key quotes

“The strong balance sheets of the country’s banks allowed them to play a role as a shock absorber for the economy.”

“That capital has been built up precisely so that banks are able, in times of stress, to absorb losses and sustain the flow of credit to the broader economy.” 

“Now is the time to allow that to happen. It means capital ratios will come down over the year ahead: that should surprise no one.”