Featured Product

    RBNZ to Introduce Deposit Protection and Accountability Regimes

    June 24, 2019

    RBNZ announced that the Cabinet signed off an in-principle decision to introduce a deposit protection regime in New Zealand, as a result of work under Phase 2 of the review of the Reserve Bank Act. The government is also considering an accountability regime along the the lines of Bank Executive Accountability Regime in Australia and the Senior Managers Regime in UK. Final decisions on the full details of a deposit protection regime and the strengthened accountability standards will be announced in early 2020.

    The government is proposing a limit between $30,000 and $50,000 for the deposit protection regime. This would cover 90% of individual bank deposits in New Zealand, which is similar to the international schemes. This follows a consultation with the sector. The Finance Minister Grant Robertson said, “New Zealand has been an outlier for many years in that we don’t have a formal deposit protection regime to support Kiwis if a bank were to fall over." Banks in the country are "safe and sound" but "the OECD and IMF have said that our banking system might be more vulnerable in a crisis because we don’t have a deposit protection regime." A deposit protection regime is expected to increase public confidence in the banks.

    The government is also ensuring that bank regulators in New Zealand have the right tools to hold the banks and their executives to account. The Cabinet has decided that the next consultation in Phase 2 of the RBNZ review will look at whether the supervisory regime of RBNZ is sufficiently strong. It will also review the enforcement tools RBNZ has, including whether penalties are tough enough to discourage certain behavior. The government is considering adopting elements of overseas frameworks, which would increase the responsibilities and accountabilities of senior executives for the actions of banks and licensed deposit-takers in New Zealand. The Bank Executive Accountability Regime in Australia and the Senior Managers Regime in the UK are two examples of frameworks that assign duties to individual decision-makers at banks, so that if things go wrong the individuals directly responsible can be identified and held to account. “These regimes go a step further than New Zealand’s current Director Attestation Regime for banks, by also holding senior managers to account for the prudent management of their bank within their area of responsibility,” Grant Robertson says.

     

    Related Links 

    Keywords: Asia Pacific, New Zealand, Banking, Deposit Protection, Accountability Regime, Operational Risk, RBNZ

    Related Articles
    News

    PRA to Elaborate on Approach to Transposition of CRD5 by Mid-December

    PRA published a statement that explains when to expect further information on the PRA approach to transposing the Capital Requirements Directive (CRD5), including its approach to revisions to the definition of capital for Pillar 2A.

    November 30, 2020 WebPage Regulatory News
    News

    SRB Sets Out Work Program for 2021-2023

    SRB published the work program for 2021-2023, setting out a roadmap to further operationalize the Single Resolution Fund and to achieve robust resolvability of banks under its remit over the next three years.

    November 30, 2020 WebPage Regulatory News
    News

    EIOPA Consults on KPIs on Sustainability for Non-Financial Reporting

    EIOPA is consulting on the relevant ratios to be mandatorily disclosed by insurers and reinsurers falling within the scope of the Non-Financial Reporting Directive as well as on the methodologies to build these ratios.

    November 30, 2020 WebPage Regulatory News
    News

    US Agencies Issue Statement on LIBOR Transition

    US Agencies (FDIC, FED, and OCC) issued a joint statement encouraging banks to cease entering into new contracts that use USD LIBOR as a reference rate as soon as practicable and in any event by December 31, 2021, to facilitate an orderly LIBOR transition.

    November 30, 2020 WebPage Regulatory News
    News

    GHOS Endorses Coordinated Approach to Mitigate COVID Risks for Banks

    The Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS, endorsed a coordinated approach to mitigate COVID-19 risks to the global banking system.

    November 30, 2020 WebPage Regulatory News
    News

    HM Treasury Extends Consultation Dates for FRF and Solvency II Reviews

    HM Treasury extended the consultation period on Phase II of the Future Regulatory Framework (FRF) Review, from January 19, 2021 to February 19, 2021.

    November 30, 2020 WebPage Regulatory News
    News

    ECB Publishes Guide on Management of Climate and Environmental Risks

    ECB finalized guidance on the way it expects banks to prudently manage and transparently disclose climate and other environmental risks under the current prudential rules.

    November 27, 2020 WebPage Regulatory News
    News

    BCBS Amends Capital Treatment of Non-Performing Loan Securitizations

    BCBS published a technical amendment to the capital treatment of securitizations of non-performing loans by banks.

    November 26, 2020 WebPage Regulatory News
    News

    PRA Policy on Stressed VaR and RNIV Calculations Under Market Risk

    PRA published the policy statement PS23/20 on the calculation of stressed value at risk (sVAR) and risks not in value at risk (RNIV) under the market risk framework.

    November 26, 2020 WebPage Regulatory News
    News

    BoE to Move Statistical Data Collection to BEEDs Portal

    BoE announced that the Data and Statistics Division is planning to move collection of statistical data to the BoE Electronic Data Submission (BEEDS) portal.

    November 25, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 6179