The Australian Prudential Regulation Authority plans to ease banks' risk weights to free up capital to support lending.

Golden Ten Data reported on June 29 that the Australian Prudential Regulation Authority (APRA) publicly solicited opinions on June 29 regarding amendments to bank credit risk capital settings, aiming to increase credit supply to support the economy while maintaining the robustness of the financial system. While adhering to the principle of keeping the banking system “unquestionably strong,” APRA plans to lower the standard risk weights for certain corporate loans to better align with actual risks. Key proposals include: reducing the risk weights for domestic large-scale public infrastructure loans; lowering the risk weights for high-quality unrated corporate loans that meet specific conditions; and adjusting the standards for land acquisition, development, and construction (ADC) loans to allow more residential development projects to apply the lower 100% risk weight. APRA plans to finalize this scheme in the second half of 2026 and officially implement it on April 1, 2027.