Regulatory Alerts2022-05-17
Review of bank capital adequacy requirements for housing loans and internal models processes
The Reserve Bank of New Zealand proposes aligning capital adequacy definitions for internal models and standardised banks to ensure consistent Loan-to-Value Ratio calculations. The consultation seeks feedback on extending the definition of loan amount to include all claims secured by first-ranking mortgages and mandating independent property valuations for all banks. Additionally, the document outlines proposals to formalise internal model approval processes and clarifies the treatment of partially secured residential mortgages within the regulatory framework.
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