SYDNEY (Reuters) - Australia’s prudential and corporate regulators are checking the contingency plans of banks and other financial institutions to prepare for a potential coronavirus pandemic which could severely disrupt economic and financial systems.
Prime Minister Scott Morrison said on Thursday there was every sign the world was about to be gripped by a pandemic of coronavirus, and Canberra triggered emergency measures to restrain the spread of the disease.
The Australian Prudential Regulation Authority (APRA) said it had contacted the banks, pension funds and insurers that it oversees to make sure they had adequate plans in place.
“APRA is also liaising with entities to gain a deeper understanding of current or potential future impacts on their businesses related to coronavirus, as we continue to monitor developments,” the regulator said in a statement.
Banks have been in talks with APRA for much of February as outbreak spread around the world from China, two people familiar with the talks said.
A spokesman for Westpac Banking Corp (WBC.AX), Australia’s second largest bank, said it had assured the regulator it had “a pandemic plan that meets the expectations”, including “business continuity plans and risk mitigation strategies”. The bank has barred travel to China for business purposes.
A spokesman for Australia and New Zealand Banking Group (ANZ.AX) said the bank was planning to “ensure the safety of ANZ staff and to enable banking services to be continued as far as is practicable.”
“In the regions ANZ operates that are most-impacted by COVID-19, such as China, that plan includes teams being split and working in alternate locations to prevent potential spread.”
ANZ also restricted travelling internationally to contain any potential spread of the virus, the spokesman added.
Commonwealth Bank of Australia (CBA.AX), the country’s largest, said it had been following the advice from the government to help the country deal with the ongoing impact of the outbreak.
A National Australia Bank (NAB.AX) spokeswoman said the bank had plans in place “to respond to coronavirus (COVID-19)” without specifying what those plans were.
“NAB bankers are also providing assistance and advice to business customers who have been financially affected,” she added in an emailed statement.
The chair of the Australian Securities and Investment Commission (ASIC) told a parliamentary committee “significant market participants” had been contacted to check on their business continuity plans, and the watchdog was monitoring market disclosures of listed firms.
Deloitte Access Economics estimated the coronavirus could cost the Australian economy up to A$5.9 billion ($3.9 billion) in the first half of the year as measures to combat the rapid global spread hit the major export sectors of education, tourism and mining.
Reporting by Paulina Duran in Sydney; Editing by Lincoln Feast.