APRA updates on aggregate Committed Liquidity Facility

January 06, 2022 06:57 PM AEDT | By Samta

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APRA updates on aggregate Committed Liquidity Facility — Image source: © Somemeans | Megapixl.com

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Highlights

APRA announced to reduce the aggregate Committed Liquidity Facility to AU$102 billion.

The CLF scheduled on 1 January has occurred as per the schedule.

ADI’s CLF allocation would drop to zero through equal reductions on 1 January, 30 April, 31 August, and 31 December 2022.

By the end of 2022, APRA expects locally incorporated ADIs subject to the Liquidity Coverage Ratio (LCR) to have eliminated their reliance on the Committed Liquidity Facility (CLF). This was announced on 10 September 2021 and is subject to financial conditions.

APRA further stated that an ADI's CLF allocation would be reduced to zero in equal instalments on 1 January, 30 April, 31 August, and 31 December 2022. An ADI could lower its CLF early if it believes it has sufficient surplus funds and liquidity.

The CLF has been reduced, as planned, beginning January 1, 2022. The aggregate CLF has been cut to roughly $102 billion on January 1, 2022, from over $140 billion on September 10, 2021, because of this and prior reductions sought by some ADIs.

Following the second scheduled reduction, APRA aims to offer another update on the size of the aggregate CLF in May 2022.

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