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
Amnon Levy
Financial researcher; authority in credit portfolio management and AI/ML, risk-based pricing, climate and credit, CECL/IFRS 9; credit and ALM
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.
Previous Article
PRA Consults on Implementation of Certain Provisions of CRD5Related Articles
FSB Sets Out Effective Practices for Cyber Incident Recovery
FSB finalized the toolkit of effective practices to assist financial institutions in their cyber incident response and recovery activities.
HKMA Urges Early Action for Adherence to IBOR Fallbacks Protocol
HKMA urged authorized institutions to take early action to adhere to the IBOR Fallbacks Protocol, which ISDA is expected to publish soon.
FSB Sets Out Roadmap for Transition to Alternative Reference Rates
FSB published a global transition roadmap for London Inter-bank Offered Rate (LIBOR).
HM Treasury Publishes Response to Proposal on BRRD2 Transposition
HM Treasury published a document that summarizes the responses received from a consultation on the approach of UK to transposition of the revised Bank Resolution and Recovery Directive (BRRD2).
HM Treasury Publishes Response to Proposal on CRD5 Transposition
HM Treasury published the government response to the feedback received on the consultation for updating the prudential regime of UK before the end of the Brexit transition period.
BoE Publishes Reporting Schedule for Statistical Returns
In a recent statistical notice, BoE announced publication of the reporting schedule for statistical returns for 2021.
EC Welcomes Declaration by Member States on EU Cloud Federation
EC welcomed the joint declaration by 25 EU member states on building the next generation of cloud in Europe.
MAS Amends Notice on Issuance of Covered Bonds by Banks in Singapore
MAS published amendments to Notice 648 on the issuance of covered bonds by banks incorporated in Singapore.
FDIC Selects Technology Companies for Rapid Prototyping Competition
FDIC has selected 14 technology companies—including Accenture Federal Services, LLC, Fed Reporter, Inc, and S&P Global Market Intelligence, LLC—for inclusion in the next phase of the rapid prototyping competition.
GLEIF Defines New Validation Agent Role for Financial Institutions
GLEIF announced that financial institutions worldwide can realize a variety of cost, efficiency, and customer experience benefits by assuming a new “validation agent” role within the Global Legal Entity Identifier (LEI) System.
