Stress test poised to expose weaknesses in $4 trillion super system
Banking regulator APRA is poised to reveal concerns about how some funds would perform in a crisis, and over the linkages between the super sector and the big four banks.
The prudential regulator is putting the finishing touches on a report that will expose vulnerabilities in Australia's $4 trillion superannuation sector, following a year long stress test into the resilience of the country's largest banks and retirement funds.
The Australian Prudential Regulation Authority (APRA) has over the past 12 months been testing how the big four banks - CBA, Westpac, NAB and ANZ - and the six largest super funds – including AustralianSuper and Australian Retirement Trust (ART) – would manage a very severe but hypothetical stress event.
Two people with direct knowledge of the stress tests told Capital Brief APRA's findings will be released later this week, identifying weaknesses in the system, including liquidity risks.
The concerns relate to how super funds and banks would perform in a crisis and could open the door to intervention from APRA and the Reserve Bank including the introduction of enhanced liquidity rules, one of the sources suggested.
