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The Australian Prudential Regulation Authority’s (APRA) decision to enforce harder liquidity requirements could stimulate the development of a secondary loan market, Goldman Sachs JBWere co-chief executive Simon Rothery has said.
According to a report in The Australian, APRA’s proposal to make banks hold a month’s worth of liquidity could force some of the majors to sell their loans, providing the basis for an Australian market in secondary loans.
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“APRA is going to bring in much harder liquidity requirements which will be quite costly for the banks. They will have to recycle and trade their loan portfolios because of the new regulations coming in,” Mr Rothery told the daily.
APRA released a discussion paper in September about its plans to change the liquidity requirements from five business days to one month.
Comments on the paper are due by the end of this month.
