In the context of the disruption caused by COVID-19, RBNZ has announced regulatory relief measures to support the provision of credit and market functioning. Key among them is the RBNZ decision to delay the start date of the increased capital requirements for banks by 12 months, to July 01, 2021. RBNZ expects that this step will enable banks to provide an additional AUD 47 billion of credit. Should conditions warrant it next year, RBNZ will consider whether further delays are necessary. RBNZ also stated that it has a number of additional tools to provide additional liquidity and support to market functioning, should these be required in the future.
RBNZ is postponing the publication of exposure drafts of the revised policy documents related to the increased capital requirements. These drafts were planned to be published on April 01, 2020. Additionally, RBNZ will be extending the transition period for its revised outsourcing policy by 12 months. Affected banks will now need to be fully compliant with the new requirements by October 01, 2023. Finally, RBNZ will defer external-facing work on the following regulatory initiatives, for an initial period of six months:
- Review of the bank liquidity thematic review (and subsequent review of the liquidity policy)
- Review of the Insurance (Prudential Supervision) Act 2010
- Standard terms for Residential Mortgage Obligations
- Cyber resilience guidelines for all regulated entities
- Revisions to banks’ disclosure of regulatory breaches
- Review of the stress-testing framework and planned bank stress tests
- Revising the process for approving banks’ internal capital adequacy models for credit risk
- Press Release, March 18, 2020
- Press Release, March 16, 2020
- Press Release, March 09, 2020
- Overview of Capital Adequacy Framework
Keywords: Asia Pacific, New Zealand, Banking, Insurance, Capital Requirements, COVID-19, Liquidity Requirements, Stress Testing, Credit Risk, Operational Risk, RBNZ
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