Regulatory Alerts2022-05-17
Response to submissions on standardised approach to Basel 2
The Reserve Bank of New Zealand issued amendments to the Capital Adequacy Framework (Standardised Approach) in response to industry consultations on Basel 2 implementation. Key changes include allowing banks to set board-approved policies for residential mortgage valuations, recognizing Housing New Zealand Corporation as a qualifying insurer, and adjusting risk weights for past-due insured loans and local authority securities. The regulator maintained existing thresholds for lender's mortgage insurance coverage and financial strength ratings while rejecting proposals to include unsolicited ratings in capital calculations.
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