Proposal to increase bank capital

3 Month 2019

Reserve Bank publishes in-depth information on proposal to increase bank capital

The Reserve Bank of New Zealand today published additional background information on its proposal to increase the amount of capital that banks must hold.

The Reserve Bank has proposed increasing the amount of capital banks must have, to ensure they can withstand financial and economic shocks.

The paper published today provides in-depth information for anyone who wants to provide feedback during the public consultation process. The paper contains more detail about the analytical framework and methodology, and quantitative modelling approach underpinning the Reserve Bank’s proposals, expanding on how the proposals were developed.

Since the Reserve Bank opened public consultation on the proposals in mid-December, we have been receiving feedback via briefings and meetings with banks, investors, the news media, and industry bodies. Feedback sent to the Reserve Bank will be published after the consultation closes.

Whether you agree or disagree with our proposals, or would like to contribute to the discussion, the Reserve Bank would like to hear from you.

Please send us your thoughts, by 5pm on 3 May 2019, to CapitalReview@rbnz.govt.nz.

New information:

• Background paper. An outline of the analysis supporting the risk appetite framework

Simple summaries:

• Safer banks = safer society

• Video: What is capital adequacy?

• Non-technical summary: How much capital is enough? (PDF 1.45MB)

Technical information:

• Consultation paper: How much capital is enough? (PDF 1.17MB)

• Capital Review web pages

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