Aussie banks slash quasi-HQLAs by 27%

Lenders told to cut reliance on central bank repos for liquidity coverage amid a glut of government debt

Australia’s ‘big four’ banks slashed the amount of central bank repo assets in their liquidity buffers by 27% in the three months to end-September, responding to the regulator’s call for banks to expunge assets other than government debt from their reserves by year-end.

Amid a shortage of government bonds, which constitute the only accepted form of high-quality liquid assets (HQLAs) per local rules, Australian lenders have been allowed to treat drawdowns from the central bank’s committed