Quarterly Statement by the Council of Financial Regulators – March 2024

Council of Financial Regulators Quarterly Statement - March 2024

Key Takeaways:

The Council of Financial Regulators held its quarterly meeting on March 6, discussing current and emerging vulnerabilities in the financial system. The Council emphasized the need for ongoing close attention to risks related to household lending, noting that while most households can still meet their debt servicing commitments, some have had to make adjustments due to higher inflation and interest rates. Additionally, the Council noted an increase in hardship applications and households falling behind on loan payments.

The Council also discussed the soundness of lending standards, preliminary insights from the Hypothetical Borrower Exercise suggesting that banks have maintained sound lending practices despite a competitive environment. Concerns were raised about the challenges in the global and Australian commercial real estate markets, with risks to the financial system assessed as contained but requiring close monitoring.

Furthermore, the Council emphasized the importance of improving preparedness and resilience to cyber-attacks, expanding the Cyber Operational Resilience Intelligence-led Exercises (CORIE) program, and deepening analysis of artificial intelligence-related risks.

The Council also touched on the challenges in the cash-in-transit industry and encouraged participants to adopt the e-Conveyancing Payments Industry Code to promote interoperability, security, trust, and competition in the e-conveyancing industry.

Overall: The quarterly statement highlights the Council's focus on promoting financial system stability, cooperation among member agencies, and the need for ongoing monitoring and preparedness in response to emerging vulnerabilities and risks.