Regulatory Alerts2022-05-17
Reserve Bank of New Zealand Consultation on Covered Bonds Regulatory Framework
The Reserve Bank of New Zealand proposes a formal regulatory framework for covered bonds, including a legislative basis and a proposed issuance limit of 10 percent of total assets. This consultation seeks stakeholder input on the benefits of diversifying funding and lengthening maturity profiles against risks such as asset encumbrance and subordination of depositors. The document outlines the prudential implications, capital adequacy requirements, and disclosure standards necessary to support the development of a domestic covered bond market.
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