Crisis Management Arrangements

Each of the four Council of Financial Regulators (CFR) member agencies has a specific role in planning for and managing a major disruption to the financial system. The CFR has a role to coordinate responses to a range of circumstances involving potential or actual instances of financial instability. This role is detailed in an updated Memorandum of Understanding (MOU) on Crisis Management, which the CFR signed in July 2025. The MOU sets out the CFR’s crisis management framework, including its objectives, principles and processes. It also sets out the responsibilities of the individual CFR members during situations of potential or actual stress.

In its role as prudential supervisor and resolution authority for regulated financial institutions, APRA aims for institutions to be prepared to recover from severe distress themselves, including through credible recovery plans. Recovery plans are developed and implemented by the financial institutions, and reviewed by APRA. They outline actions that financial institution could take to restore viability following a large loss or liquidity shortfall (for instance, strategies for raising additional capital). If recovery actions are insufficient and APRA determines that a financial institution is or may become non-viable, it has the powers to step in to protect depositors and beneficiary interests, maintain the continuity of critical functions and safeguard financial stability. This process is commonly referred to as ‘resolution’.

The CFR also plays an active role in advancing Australia's crisis management arrangements, including through the development of Australia’s deposit guarantee arrangement, known as the Financial Claims Scheme (FCS).

CFR agencies conduct regular crisis exercises and simulations to ensure they are adequately prepared to resolve failures and near-failures in an orderly manner. Simulations are sometimes also carried out under the auspices of the Trans-Tasman Council on Banking Supervision (TTBC).

Trans-Tasman Council on Banking Supervision (TTBC)

In recognition of the strong links between the Australian and New Zealand financial systems, the CFR also plays a central role in coordinating and advancing trans-Tasman crisis resolution and planning arrangements. This is achieved through CFR members' involvement in the Trans-Tasman Council on Banking Supervision (TTBC).