1. In July 2020, the Australian Prudential Regulation Authority (APRA)provided guidance to Australian banks and restricted dividend payouts to less than 50% of their earnings in 2020. What is the main reason for this restriction and how has it affected bank capital? In hindsight, do you think such a restriction was necessary?

2. Explain two (2) most important factors bank management should consider when determining its target capital ratio.

Answer rating: 100% (QA)

1 Restriction on Dividend Payouts by APRA in 2020 Main Reason The main reason behind APRAs guidance to restrict dividend payouts to less than 50 of ea... View the full answer