RBNZ Announces COVID-19 Relief Measures for Financial Institutions
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
Related Links
- 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
Featured Experts
Jing Zhang
Quantitative researcher; credit risk modeling and analysis expert; in-demand industry speaker; published author and CCAR authority
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Previous Article
IAIS Publishes Global Insurance Market Report for 2019Related Articles
Regulators Fine Goldman Sachs for Risk Management Failures
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
Canada Hosts International Conference of Banking Supervisors
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA Proposes More Measures to Help Insurance Customers Amid Crisis
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA Issues Opinion to Address Risk Stemming from Legacy Instruments
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB Publishes Non-Bank Financial Intermediation Risk Monitor for 2020
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury Publishes Policy Statement Amending Benchmarks Regulation
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA Initiates Action Against a Bank for Liquidity Compliance Breach
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA Consults on Implementation of Certain Provisions of CRD5 and CRR2
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies Finalize Rule to Reduce Impact of Large Bank Failures
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies Finalize Rule on Net Stable Funding Ratio Requirements
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.
