APRA Conducts a Prudential Supervisory Framework That Assesses FI Risk

question 32

Essay

APRA conducts a prudential supervisory framework that assesses FI risk and likelihood of FI failure and determines an appropriate supervisory response.Outline the two systems implemented by APRA-PAIRS and SOARS-and the purpose of the assessment system.

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Definitions:

Equity Interest

Ownership interest in a company, usually in the form of stocks, representing a share of the earnings and assets of the business.

Cash Dividend

A payment made by a corporation to its shareholders, usually in the form of cash.

Net Income

The profit a company retains after all financial obligations, like costs and taxes, are subtracted from its total income.

Cost Method

An accounting method used to value inventory or investments at their original purchase cost.