News: WBC UPDATE 1-Westpac breached liquidity standards, Australian regulator says

(Adds details of APRA action, background on scandal)

Dec 1 (Reuters) - Australia's Westpac Banking Corp (WBC) breached liquidity standards over the past two years, the country's prudential regulator said on Tuesday, asking for an independent review of the lender's risk management and compliance.

The Australian Prudential Regulation Authority (APRA) said the breaches relate to Westpac incorrectly calculating its liquidity coverage ratio and net stable funding ratio during 2019 and 2020, showcasing "weaknesses in risk management and oversight, risk control frameworks and risk culture."

Even though those breaches had been fixed, APRA said it will level a 10% add up to the net cash outflow component of Westpac's liquidity coverage ratio until the reviews are over.

Westpac did not immediately respond to a Reuters request for comment.

The finding spells yet another piece of bad news for Australia's third-largest lender, which last year faced a major money-laundering case that exposed deficiencies in its oversight and risk controls and resulted in a record A$1.3 billion ($955 million) fine.

After that scandal was brought to light, APRA imposed a A$1 billion add-on to Westpac's risk capital requirements. It said that add-on will remain in place until the regulator is "satisfied that deficiencies in risk governance have been adequately remediated." ($1 = 1.3607 Australian dollars)