The Australian Prudential Regulation Authority has dialed back the stringent liquidity requirements imposed on Macquarie Group's (ASX:MQG) Macquarie Bank, citing significant progress in the bank's efforts to fix historical risk management flaws.
Effective immediately, the regulator has reduced the bank’s net cash outflow overlay from 25% to 15% and completely removed the 1% penalty on its available stable funding.
The penalties were originally leveled in 2021 and 2022 after "material breaches" exposed systemic weaknesses in how the "Millionaires' Factory" managed liquidity and operational risk.
APRA's decision to ease these requirements follows a comprehensive supervisory assessment and an independent assurance report confirming that Macquarie has successfully overhauled its reporting controls.
Despite the reprieve, APRA is keeping the bank on a leash.
The remaining 15% NCO add-on will stay in place until all remediation activities are fully embedded.
Furthermore, a separate $500 million operational risk capital overlay remains unchanged, serving as a reminder that while Macquarie is moving in the right direction, its regulatory homework isn't quite finished.