The enforcement action realties to the incorrect treatment of “specific intra-group funding arrangements” as well as multiple breaches of reporting standards resulting from deficiencies in Macquarie Bank’s ability to manage operational risk In the “complex intra-group structure”.
“The breaches are historical and do not impact on the current overall soundness of Macquarie Group’s capital or liquidity positions. However, they raise serious questions about the bank’s risk management practices and ability to calculate and report key prudential ratios,” APRA said.
Macquarie will have to hold an operational capital overlay of $500 million, effective 1 April 2021.
“Alongside the enforcement actions, APRA will subject Macquarie Bank to intensified supervision to address the bank’s persistent difficulties in complying with its prudential obligations,” said APRA deputy chair John Lonsdale.
“We cannot rule out further action as more information comes to light about the root causes of these breaches.”
