Featured Product

    RBNZ Announces Further Regulatory Updates Amid Continued Crisis

    November 11, 2020

    RBNZ announced that it has signed the IBOR Fallbacks Protocol recently published by ISDA. RBNZ stated that, as a market participant, this is an important step for RBNZ to support an effective and efficient transition away from LIBOR and other key interbank-offer rates (IBORs) by the end of 2021. RBNZ also announced regulatory delays and other developments owing to the COVID-19 crisis; these announcements relate to the Capital Review implementation timing and consultation, loan-to-value ratio restrictions, and dividend restrictions.

    RBNZ announced that it is further delaying the start of increases in bank capital until 2022 to allow banks continued headroom to respond to the effects of the COVID-19 pandemic and to support the economic recovery. This delay supports other actions that RBNZ has taken to cushion the initial economic blow of COVID-19 by promoting cash flow and confidence in the financial system. The changes mean the increase in the Prudential Capital Buffer will not begin until July 2022. RBNZ will reconfirm this timing near the end of 2021 and will consider making further amendments to the timing if the conditions warrant it. Other aspects of the capital reforms will proceed from July 01, 2021, including the new rules around capital instruments. Other regulatory announcements are as follows:

    • In December 2020, RBNZ will consult about re-instating the loan-to-value ratio, or LVR, restrictions on high-risk lending, with effect from March 01, 2021. The loan-to-value ratio restrictions are used to reduce the risks to financial stability from higher-risk lending. The restrictions were removed in May to ensure that credit could flow and that they did not have an undue impact on the mortgage deferral scheme implemented in response to the COVID-19 pandemic.
    • Restrictions on dividends and redeeming non-Common Equity Tier 1 (CET1) capital instruments that were put in place in April 2020 will be retained until March 31, 2021 or later, if required. 
    • RBNZ wrote to insurers advising that it has updated expectations on dividends. RBNZ expects that insurers will only make dividend payments if it is prudent for that insurer to do so, having regard to their own stress testing and the elevated risks in the current environment.


    Related Links

    Keywords: Asia Pacific, New Zealand, Banking, Insurance, Benchmark Reforms, Fallback Protocol, Basel, Regulatory Capital, LTV, Dividend Distribution, IBOR, COVID-19, ISDA, RBNZ 

    Featured Experts
    Related Articles
    News

    EIOPA Report Analyzes Use and Impact of Long-Term Guarantee Measures

    EIOPA submitted—to the European Parliament, the Council of the European Union, and EC—its 2020, fifth, and last annual report on long-term guarantee measures and measures on equity risk.

    December 03, 2020 WebPage Regulatory News
    News

    BIS, SNB, and SIX Announce Successful Completion of CBDC POC

    The BIS Innovation Hub Swiss Centre, SNB, and the financial infrastructure operator SIX announced the successful completion of a joint proof-of-concept (PoC) experiment as part of the Project Helvetia.

    December 03, 2020 WebPage Regulatory News
    News

    EBA Sets Out Treatment of Certain Banking Book Positions Under FRTB

    EBA published the final draft regulatory technical standards for calculation of own funds requirements for market risk, under the standardized and internal model approaches of the Fundamental Review of the Trading Book (FRTB) framework.

    December 03, 2020 WebPage Regulatory News
    News

    EIOPA Consults on Integrating Climate Change into SII Standard Formula

    EIOPA published discussion paper on a methodology for the potential inclusion of climate change in the Solvency II (sometimes also written as SII) standard formula when calculating natural catastrophe underwriting risk.

    December 02, 2020 WebPage Regulatory News
    News

    EU Issues Corrigenda to Investment Firms Directive and Regulation

    EU published, in the Official Journal of the European Union, corrigenda to the Directive and the Regulation on the prudential requirements and supervision of investment firms.

    December 02, 2020 WebPage Regulatory News
    News

    MAS Proposes Changes to Rules Arising from Banking Amendment Act

    MAS proposed amendments to certain regulations, notices, and guidelines arising from the Banking (Amendment) Act 2020.

    December 02, 2020 WebPage Regulatory News
    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

    RBNZ Consults on Aspects of Insurance Act, Solvency Standards & IFRS17

    RBNZ launched consultations on the scope of the Insurance Prudential Supervision Act (IPSA) 2010 and on the associated Insurance Solvency Standards.

    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
    RESULTS 1 - 10 OF 6191