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Dec 12 (Reuters) - Australia's prudential regulator said on Tuesday it has updated requirements for banks to better manage risks arising from interest rate changes following a consultation in November last year.

The Australian Prudential Regulation Authority (APRA) has revised Prudential Standard APS 117 Interest Rate Risk in the Banking Book (IRRBB), aimed at reducing some volatility in the IRRBB charge, among others.

IRRBB is the risk to earnings or value arising from movements in interest rates that affect banking book positions.

The revisions came after central banks globally raised interest rates sharply in an effort to curb stubbornly high inflation.

The regulator said it has now started a short consultation on some aspects of APS 117 which are also relevant to smaller banks.

"A failure to manage interest rate risk was one of the primary factors behind the collapse of several U.S. banks this year," APRA member Therese McCarthy Hockey said.

"The new and proposed changes incorporate lessons learned from the recent large interest rate movements and overseas bank failures."

The regulator intends to finalise APS 117 by the middle of 2024, ahead of the updated standard coming into effect from Oct. 1, 2025.