RBNZ delays new capital rules

The Reserve Bank of New Zealand has delayed the introduction of new capital rules to allow financial firms to combat the Covid-19 outbreak.

New requirements asked New Zealand’s four largest banks to raise the capital they hold to 18%, while smaller banks were asked to hold a minimum of 16%. The changes were due to come into force from July 2020.

The RBNZ has now deferred the start date for 12 months, which it says should enable banks to provide an additional NZ$47 billion ($27.5 billion) of credit.

“It is important that firms have as much capacity as possible to deal with critical problems as they arise,” said deputy governor, Geoff Bascand.

“It makes sense for regulators to free up financial institutions to focus on matters such as helping customers through financial or other stress, or increasing their degree of monitoring and managing their own most urgent risks.”

Over the next six months, the RBNZ will also delay reviews on bank liquidity, insurance prudential supervision, cyber resilience guidelines and regulatory disclosures, among others.