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Statements of Expectation and Intent

From time to time the Government issues APRA with a Statement of Expectations, setting out its key expectations for APRA in undertaking its role. APRA responds with a Statement of Intent outlining its intended approach to fulfilling its role. These documents are published, with the most recent being finalised in 2018.1

The Statement of Expectations provides important context and guidance for APRA, such as that the Government:

  • expects APRA to focus on preventative aspects to safeguard Australia’s financial system;
  • acknowledges that, in performing its role, APRA is required to balance several objectives and that, at times, this may not be straightforward and the appropriate balance will require professional judgement;
  • regards competition in the system as a key Government policy priority and expects APRA to facilitate an environment where innovation and competition are encouraged and barriers to entry are minimised;
  • expects APRA to publicly communicate how it has balanced its regulatory responsibilities and objectives in acting to promote financial system stability in Australia; and
  • recognises that prudential regulation cannot and should not seek to guarantee a zero-failure rate of prudentially regulated institutions or provide absolute protection for market participants.

APRA’s Statement of Intent acknowledges these points and notes:

  • APRA cannot eliminate the risk that any institution might fail and it recognises that attempting to do so would impose an unnecessary burden on institutions and the financial system. APRA’s aim is to identify the likely failure of an APRA-regulated institution early enough so that corrective action can be promptly initiated or an orderly exit achieved;
  • APRA’s approach is based on the fundamental premise that the primary responsibility for financial soundness and prudent risk management within an APRA-regulated institution rests with its board of directors and senior management;
  • APRA adopts a risk-based approach to prudential supervision that is designed to identify and assess those areas of greatest risk to an APRA-regulated institution (or to the financial system as a whole) and then direct attention and resources to those risks; and
  • in undertaking its role and in setting its strategic priorities, APRA will take into consideration emerging trends and risks and the Government’s policy priorities for the financial system, where this does not conflict with APRA’s core objectives.


  1. The 2018 Statement of Expectations is available at: https://www.apra.gov.au/statement-expectations-2018