Regulatory Alerts2022-05-17
Capital review - Capital disclosure
The Reserve Bank of New Zealand's Financial Policy division monitors the Australian Prudential Regulation Authority's proposal to enhance transparency in Australian Deposit-taking Institutions' capital frameworks. The document analyzes APRA's consultation on adopting 'internationally harmonised' capital ratios to improve comparability and market discipline while maintaining conservative capital standards. Financial Policy concludes that while dual reporting may benefit New Zealand banks reliant on offshore funding, it recommends relying on more reliable measures like credit ratings and leverage ratios due to the uncertainty inherent in estimating harmonised ratios.
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