The Council of Financial Regulators published a summary of its quarterly meeting focused on heightened risks to the Australian financial system and the regulatory response. It said global financial stability risks had risen following the escalation of conflict in the Middle East, although direct exposures of the Australian financial system to the region were limited. Against that backdrop, the Council said banks should maintain strong capital and liquidity and that lending standards should remain prudent given high household indebtedness, recent strong credit growth and reports of strong competition among lenders. The meeting also reviewed operational readiness for financial stress. The Council said member agencies have a broad set of crisis tools available, including market powers, liquidity operations and policy settings that can be adjusted quickly, and it noted recent steps to strengthen inter-agency coordination and regular testing of crisis response mechanisms. It reviewed progress in resolution planning with key financial institutions and agreed an inter-agency workplan for the year ahead to improve preparedness for capital and liquidity stress scenarios. Separately, the Council said cyber and operational risks were increasing in scale and complexity, with joint work for the year ahead covering cyber stress testing through the Cyber Operational Resilience Intelligence-led Exercises framework, emerging risks from quantum computing and common dependence on critical third parties. On regulatory reform, the Council said agencies, together with the Australian Competition and Consumer Commission, had identified actions to streamline data collection and data sharing across regulators, reduce duplication and inconsistencies, and improve coordination and transparency. It agreed to publish an overview of those actions in the first half of 2026. The meeting also covered preparations for the International Monetary Fund's 2026 Financial Sector Assessment Program, wholesale cash distribution issues and follow-up initiatives expected after Project Acacia on tokenisation in wholesale asset markets.
Council of Financial Regulators2026-03-23
Council of Financial Regulators flags elevated geopolitical and cyber risks and agrees 2026 crisis preparedness workplan
The Council of Financial Regulators said global financial stability risks have increased, while direct Australian exposures to the Middle East remain limited. It urged banks to maintain strong capital and liquidity, called for prudent lending standards, and agreed a workplan to strengthen crisis preparedness for capital and liquidity stress scenarios. The Council also advanced joint work on cyber resilience and said it will publish actions to streamline regulatory data collection and sharing in the first half of 2026.