Regulatory Alerts2022-05-17
Reserve Bank of New Zealand Capital Review Consultation Submissions
The Reserve Bank of New Zealand invited public submissions on its proposed increase in bank capital requirements to mitigate systemic financial risk. Submissions from The Salvation Army and Springwater Ag Limited highlight concerns regarding the distributional impacts on vulnerable communities and the agricultural sector, warning that higher capital costs may lead to reduced credit access and increased lending rates. Conversely, individual contributor Simon Tyler supports the proposed 16% capital ratio and standardized risk calculations, arguing that the long-term stability benefits outweigh short-term costs and suggesting the development of a subordinated debt market to enhance regulatory monitoring.
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