The Chairman of the Australian Prudential Regulation Authority (APRA) has announced new tougher legislation aimed at tightening the risk management rules for the country’s financial institutions. For Australian government grants, these new measures are designed to create buffers in the lending system making small business plans and grants more regulated.

APRA chairman John Laker recently told the theaustralian.news.com.au the new measures were the result of the global financial crisis. Although there was no mention of the direct result the changes would have on small business loans for Australian business, some small business in Australia are already predicting changes to the cash to the cash flow requirements.

“What it will mean is that there will be more strenuous tests applied to us in terms of the liquid holdings that we have to maintain,”Commonwealth Bank of Australia treasurer Lyn Cobley told the australian.news.com.au recently.