RBNZ Outlines Regulatory Priorities for 2020-2023
RBNZ released the Statement of Intent for 2020–2023, which details its key regulatory priorities and focus areas for this period. One of the recent focus areas is Phase 2 of the Review of the Reserve Bank Act on the regulation of deposit takers and the introduction of a deposit insurance scheme. In light of the challenges posed by the pandemic, RBNZ has decided to extend the third round of consultation for Phase 2 of the Review of the Act by six months from the original deadline for submissions and the new deadline will be October 23, 2020.
In addition to supporting recovery from the economic impact of COVID-19 crisis, RBNZ is focused on a wide range of initiatives, including assisting the transition to a low-carbon future through the climate change work, preparing for changes to its governing legislation, making the most of opportunities associated with fintech, and collaborating closely with industry, government, and co-regulators in the best interest of all New Zealanders. Work in the area of climate risk involves Climate-related Financial Disclosures proposal, Sustainable Finance Forum Interim Report, National Climate Change Adaptation Risk Assessment/Plan, contribution to a COVID-19 recovery that is cognizant of climate risks and opportunities, and working with stakeholders including the Network for Greening the Financial System, the Sustainable Insurance Forum, BIS, and other international bodies. RBNZ will continue to work closely with stakeholders to identify and remove any unnecessary barriers to new firms entering the system or obstructions for incumbent firms developing fintech solutions. RBNZ will also finish the review of the Reserve Bank Act to put in place a single regulatory regime for all deposit-takers. Additionally, for an initial period of generally six months, RBNZ has deferred the following initiatives and will review and communicate an update on its position later in 2020:
- Implementation of planned increases to capital requirements by at least 12 months and imposing dividend restrictions to ensure banks use current capital buffers to support lending
- 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
RBNZ also released the results of a survey assessing the central bank's delivery on the commitments set out in its relationship charter. The results showed banks were generally positive about their relationship with the RBNZ staff, its communications, and its willingness to ask for feedback. RBNZ will be working in the year ahead to respond to the lessons from the survey.
Related Links
Keywords: Asia Pacific, New Zealand, Banking, Insurance, Capital Framework, Climate Change Risk, ESG, Fintech, COVID-19, Stress Testing, Basel, RBNZ
Featured Experts
Emil Lopez
Credit risk modeling advisor; IFRS 9 researcher; data quality and risk reporting manager
James Partridge
Credit analytics expert helping clients understand, develop, and implement credit models for origination, monitoring, and regulatory reporting.
Nihil Patel
Data scientist; SaaS product designer; credit portfolio analyst and product strategist; portfolio modeler; correlation researcher
Previous Article
PRA Consults on Implementation of Certain Provisions of CRD5Related Articles
EBA Launches Stress Tests for Banks, Issues Other Updates
The European Banking Authority (EBA) launched the 2023 European Union (EU)-wide stress test, published annual reports on minimum requirement for own funds and eligible liabilities (MREL) and high earners with data as of December 2021.
EBA Proposes Standards for IRRBB Reporting Under Basel Framework
The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.
FED Issues Further Details on Pilot Climate Scenario Analysis Exercise
The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
