APRA Chair John Laker's address to the Abacus Convention on 9 November (download here) included 2 issues that were of concern to mutual ADI's: the impact of the new liquidity requirements and the future of the government deposit guarantee.
His address was titled "Mutuals after (my emphasis) turbulent times".
Key points were:
- he emphasised the importance of doing the basics of "bread and butter banking" well: in the last 2 years no CUBS breached the capital standards and no CUBS exited under force majeure. CUBS continue to earn solid profits.
- Liquidity, asset quality and capital remain key issues.
- Good governance and board quality are also important.
- For friendly societies he mentioned benefit fund solvency and capital.
- He noted the continued reduction in the number of CUBS and the increased scale of larger credit unions.
- He noted the global influence on local standards regarding liquidity, capital and remuneration.
- In respect of the government deposit guarantee he distinguished the core guarantee (under $1M) which is locked in until October 2011 from the large deposit guarantee and discussed the relevance of what other countries were doing.