New capital requirements will reduce borrowing costs – RBNZ
Lenders to hold substantially less than under previous recommendations
New Zealand’s central bank has introduced new capital requirements that it says will lower borrowing costs and increase competition in the banking sector.
The Reserve Bank of New Zealand (RBNZ) said today (December 17) that its new set of rules for deposit-taking financial institutions would “substantially reduce overall system capital”. This would occur alongside the introduction of new rules dictating thresholds for the type of capital that banks would need to hold to absorb potential losses.
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