Australia's prudential regulator on Thursday eased liquidity curbs imposed on Macquarie's (MQG.AX), opens new tab banking unit, citing its progress in addressing the risk-control failures that triggered repeated reporting and liquidity breaches in 2021–22.
Shares in Macquarie slipped more than 1.5% to A$210.60 by mid-session trade, underperforming a 0.3% decline in the broader benchmark (.AXJO), opens new tab, as investors assessed the partial regulatory reprieve and the bank's still‑elevated compliance obligations.
The Australian Prudential Regulation Authority (APRA) on Thursday allowed Macquarie Bank to improve how it manages and reports its cash and funding risks. In 2021, the banking arm repeatedly breached regulatory reporting and liquidity rules, prompting the regulator to ask it to hold extra capital and tighten risk controls to ensure accurate risk reporting.
The unit now needs to hold less additional cash and funding than before, as the regulator has eased the extra safety buffers it had imposed earlier. Macquarie Bank can cut the net cash outflow (NCO) add-on to 15% from 25% and remove an adjustment to its available stable funding (ASF) in its net stable funding ratio calculation.
"APRA has now concluded that the bank has remediated aspects of liquidity risk management and reporting controls that affect the NCO and ASF calculations to a level that supports a partial removal of its liquidity add-on requirements," the regulator said in a statement. Macquarie Group noted the APRA's decision to relax the liquidity add-ons, but said a separate A$500 million ($350.30 million) operational risk capital overlay remained in place and unchanged.
The changes take effect immediately, the regulator said.
