Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Reserve Bank works toward new rules on capital

10 April 2006,

Reserve Bank works toward new rules on bank capital

Capital requirements for banks will soon be made more sensitive to the risks the banks are taking, under new rules being implemented by the Reserve Bank.

Speaking (www.rbnz.govt/speeches/2489166.html) at the Retail Financial Services Forum, Deputy Governor Adrian Orr said that the Reserve Bank was working intensively on the implementation of the new international framework for bank capital adequacy, known as Basel II.

"Bank capital represents the owners' stake in the business and a platform for the bank's future growth and innovation," Mr Orr said. "For the stability of the financial system, banks need to hold capital above certain minimum levels at all times, in order to absorb unexpected losses associated with ups and downs in the economy, including severe stress events."

The Reserve Bank's implementation of Basel II is focused on making bank capital requirements more sensitive to risk, and particularly risks specific to the New Zealand environment. "These include the exposure of the economy to international commodity markets, and the high concentration of housing loans in New Zealand bank portfolios," Mr Orr said.

Basel II is not intended to lead to large changes in the level of capital in the banking system overall.

Some banks would be applying to the Reserve Bank to use their internal statistical models as part of the calculation of their minimum capital requirements. The Reserve Bank will allow this only if the internal models and the banks' processes for managing capital are of adequate quality.

"Due to the importance of banks in New Zealand that are parts of international banking groups, we are coordinating New Zealand's implementation closely with relevant foreign supervisors," Mr Orr commented.

Engagement with the Australian Prudential Regulation Authority (APRA) will be particularly important, because of the significant place in New Zealand's banking system of banks owned by Australian parent banks.

"Under the Terms of Engagement we have with APRA, we will ensure that, in meeting our responsibilities to set capital requirements for the New Zealand subsidiaries of Australian banks, we will keep compliance costs to the minimum necessary, consistent with New Zealand capital requirements being tuned to New Zealand conditions."

ENDS


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Onetai Station: Overseas Investment Office Puts Ceol & Muir On Notice

The Overseas Investment Office (OIO) has issued a formal warning to Ceol & Muir and its owners, Argentinian brothers Rafael and Federico Grozovsky, for failing to provide complete and accurate information when they applied to buy Onetai Station in 2013. More>>

ALSO:

Tomorrow, The UN: Feds President Takes Reins At World Farming Body

Federated Farmers president Dr William Rolleston has been appointed acting president of the World Farmers’ Organisation (WFO) at a meeting in Geneva overnight. More>>

ALSO:

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news