Australia is reportedly asking banks to report on crypto
Australia’s regulator has reportedly asked local banks to report cryptocurrency transactions amid the ongoing contagion of Silicon Valley Bank’s (SVB) collapse.
The Australian Prudential Regulation Authority (APRA) has started asking banks to declare their exposures to startups and crypto-related companies, the Australian Financial Review reported on March 21.
The regulator has ordered banks to improve reporting on crypto assets and provide daily updates to APRA, the Financial Review notes, citing three people familiar with the matter. The agency aims to gain more information and insight into bank exposures to crypto as well as associated risks, the sources said.
APRA declined to confirm or deny reports of looking at crypto exposure by banks in Australia to Cointelegraph. The authority was referring to a statement released last week when APRA said it would intensify its oversight of the local banking industry and seek more information from them about potential impacts.
The new measures are apparently part of APRA’s increased oversight of the banking sector in the wake of recent massive collapses in the global banking system. On March 19, UBS Group agreed to buy its ailing rival Credit Suisse for $3.2 billion after the latter collapsed over the weekend. The takeover was one of the last failures in the banking industry after the collapses of SVB and Silvergate.
Barrenjoey analyst Jonathan Mott reportedly told clients in a note that the situation “remains stable” for Australian banks, but warned that confidence could quickly be disrupted, putting pressure on bank margins.
Related: Silvergate, SBV collapse ‘definitely good’ for Bitcoin, Trezor CEO says
“Our channel checks indicate that deposits are not being pulled from smaller institutions of any size, and capital and liquidity buffers are strong,” Mott said, adding:
“But this is a crisis of confidence and credit spreads and the cost of capital will continue to rise. This will at the very least add to the margin pressure banks face, while credit quality will continue to deteriorate.”
The news comes just after the Australian Banking Association launched a cost of living survey to study the impact of the COVID-19 pandemic and geopolitical tensions on Australians. The inquiry followed an analysis of rising inflation that suggests more than 186 banks in the US are at risk of a similar closure if depositors decide to withdraw all their funds.