According to a letter received by The Australian under a "Freedom of Information" request, the Australian Prudential Regulation Authority (APRA) criticized ANZ's handling of non-financial risks just one day before the regulator announced a $250 million increase to the bank's operational risk capital add-on in August.
APRA reportedly expressed "long-standing concerns" about the bank's risk management and governance, particularly in its markets business. Such issues included the misreporting of $54 billion in government bond trades to the Australian Office of Financial Management (AOFM), which APRA attributed to "poor internal systems coupled with insufficient oversight." Despite years of discussions, APRA noted ANZ had "failed to live up to expectations" and warned of further penalties.
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