Prudential and corporate regulators from Australia are examining the contingency plans of banks and different financial institutions to prepare for a possible coronavirus pandemic which could severely disturb economic and financial systems.
Applying emergency measures
Prime Minister of Australia, Scott Morrison stated on Thursday there was every sign the world was about to be covered by a pandemic of coronavirus, and Canberra instigated emergency measures to avoid the spread of the disease.
The Australian Prudential Regulation Authority (APRA) stated it had talked to the banks, pension funds, and insurers that it keeps a check, to make sure they had adequate plans in place.
“APRA is also liaising with entities to gain a deeper understanding of current or potential future impacts on their businesses related to coronavirus, as we continue to monitor developments,” the regulator said in a statement. Banks have been in continuous talks with APRA for most of February as the outbreak spread around the globe from China, two people familiar with the talks said.
A spokesman from Westpac Banking Corp (WBC.AX), which is the second-largest bank of Australia, said it had promised the regulator it had “a pandemic plan that meets the expectations”, consisting of “business continuity plans and risk mitigation strategies”. The bank has blocked travel to China regarding business purposes.
A spokesman from Australia and New Zealand Banking Group (ANZ.AX) stated that the bank was planning to “ensure the safety of ANZ staff and to enable banking services to be continued as far as is practicable.”
“In the regions ANZ operates that are most-impacted by COVID-19, such as China, that plan includes teams being split and working in alternate locations to prevent potential spread.”
ANZ also barred traveling internationally to restraint any possible spread of the virus, the spokesman added.
Following Government’s advice
Commonwealth Bank of Australia (CBA.AX), the country’s largest, said it had been following the advice offered by the government to support the country deal with the ongoing effect of the outbreak.
A spokeswoman from National Australia Bank (NAB.AX) stated the bank had decided “to respond to coronavirus (COVID-19)” without clarifying what those plans were.
“NAB bankers are also providing assistance and advice to business customers who have been financially affected,” she added in an emailed statement.
The chair of the Australian Securities and Investment Commission (ASIC) said to the parliamentary committee “significant market participants” had been reached to check on their business continuity plans, and the watchdog was observing market disclosures of the enlisted firms.
Deloitte Access Economics approximated the coronavirus could hit the Australian economy with a blow of about A$5.9 billion ($3.9 billion) in the first half of the year as measures to fight the rapid global spread hit the major export sectors of education, tourism, and mining.
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