Regulatory Alerts2022-05-17
Reserve Bank of New Zealand Framework for Restrictions on High-LVR Residential Mortgage Lending
The Reserve Bank of New Zealand issued document BS19 to establish a macro-prudential framework for imposing quantitative restrictions on the share of high loan-to-valuation ratio residential mortgage lending by registered banks. The policy mandates standard conditions of registration that limit high-LVR lending across specified categories and regions, utilizing three-month or six-month rolling measurement periods based on bank size. Additionally, the framework includes anti-avoidance provisions to prevent banks from structuring transactions to bypass restrictions and defines specific reporting and disclosure requirements to ensure compliance and financial stability.
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