APRA says it can learn from Silicon Valley banking crisis

The news: This year's US regional banking crisis had minimal effect on Australian institutions, but it did expose weak regulatory blindspots and risks hidden in the digital finance revolution, APRA chair John Lonsdale told a conference today.

The context: During the GFC, customers of UK bank Northern Rock queued around the block to retrieve their money, drawing down the bank's deposit book by 20% in four days. Earlier this year, Silicon Valley Bank lost 85%, or USD42 billion ($65.5 billion) in two days, as customers armed with smartphones and digital banking performed a new kind of bank run.

What they said: "To ensure Australia’s banking system is equipped for this new reality, APRA will continue to press boards to lift their standards of risk management, and is prepared to act promptly, and forcefully if necessary, to rectify weaknesses ahead of serious problems emerging," Lonsdale told the Citi Australian and New Zealand Investment Conference.