Regulatory Alerts2023-09-28
BS8 Connected Exposures Policy
The Reserve Bank of New Zealand issued the BS8 Connected Exposures Policy to regulate registered banks' credit exposures to connected persons and mitigate conflict of interest risks. The policy imposes rating-contingent aggregate exposure limits based on Tier 1 capital and strictly prohibits offering more favourable terms to connected persons than to non-connected counterparts. Compliance requires robust governance systems, precise measurement of on- and off-balance sheet exposures, and adherence to specific credit risk mitigation standards.
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