APRA has turned its attention to its standards for ADI liquidity management - the liquidity coverage ratio and the net stable funding ratio – launching a review to see how they are working.

Under LCR, which took effect in 2015, ADIs must maintain an adequate level of high-quality liquid assets that can be converted into cash to meet short-term liquidity needs.

To determine the appropriate LCR, banks must estimate their net cash outflow over 30 days under stressed conditions, with higher runoff rates to apply to less stable deposits.

NSFR, which took effect in 2018, seeks to ensure that long-term assets are financed with at least a minimum of stable funding. Stable funding is the portion of an ADI's capital and liabilities expected to be a reliable source of funds over a one-year time horizon.

APRA has issued a discussion paper, saying it wants to assess the impact of the two measures. Its focus is on their benefits in terms of financial safety and stability, compliance and commercial costs, and impacts on competition.

It has put a series of questions and called for responses by April 14.