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

    EBA Analyzes Impact of Unwind Mechanism of Liquidity Coverage Ratio

    EBA published a report analyzing the impact of the unwind mechanism of the liquidity coverage ratio (LCR) for a sample of European banks over a three-year period, from the end of 2016 to the first quarter of 2020.

    November 19, 2020 WebPage Regulatory News
    News

    ECB Outlines Views on Possible Changes to AnaCredit Rule and TLTROs

    In response to questions from a member of the European Parliament, the ECB President Christine Lagarde issued a letter clarifying the possibility of amending the AnaCredit Regulation and making targeted longer-term refinancing operations (TLTROs) dependent on the climate-related impact of bank loans.

    November 19, 2020 WebPage Regulatory News
    News

    IASB Begins First Phase of Post-Implementation Review of IFRS 9

    IASB started the post-implementation review of the classification and measurement requirements in IFRS 9 on financial instruments and added the review as a project to its work plan.

    November 18, 2020 WebPage Regulatory News
    News

    FSB Report Examines Progress in Resolvability of Systemic Institutions

    FSB published a report that examines progress in implementing policy measures to enhance the resolvability of systemically important financial institutions.

    November 18, 2020 WebPage Regulatory News
    News

    EBA Benchmarks National Insolvency Frameworks Across EU

    EBA published a report on the benchmarking of national loan enforcement frameworks across 27 EU member states, in response to the call for advice from EC.

    November 18, 2020 WebPage Regulatory News
    News

    FSB Reports Assess Impact of Pandemic on Financial Stability

    FSB published a letter from its Chair Randal K. Quarles, along with two reports exploring various aspects of the market turmoil resulting from the COVID-19 event.

    November 17, 2020 WebPage Regulatory News
    News

    RBNZ Consults on Implementation of Capital Review Changes

    RBNZ launched a consultation on the details for implementing the final Capital Review decisions announced in December 2019.

    November 17, 2020 WebPage Regulatory News
    News

    IASB Announces Andreas Barckow as the New Chair from July 2021

    The Trustees of the IFRS Foundation, which are responsible for the governance and oversight of IASB, have announced the appointment of Dr. Andreas Barckow as the IASB Chair, effective July 2021.

    November 17, 2020 WebPage Regulatory News
    News

    HKMA Consults on Capital Rules for Bank Equity Investments in Funds

    HKMA issued a letter to consult the banking industry on a full set of proposed draft amendments to the Banking (Capital) Rules for implementing the Basel standard on capital requirements for banks’ equity investments in funds in Hong Kong.

    November 17, 2020 WebPage Regulatory News
    News

    ESRB Supports Extension of Macro-Prudential Measure by Swedish FSA

    ESRB published an opinion assessing the decision of Swedish Financial Supervisory Authority (FSA) to extend the application period of a stricter measure for residential mortgage lending, in accordance with Article 458 of the Capital Requirements Regulation (CRR).

    November 17, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 6153