Regulatory Alerts2022-05-17
Submissions on RBNZ Capital Review Paper 4: Optimising Bank Capital Ratios
The Reserve Bank of New Zealand issued Capital Review Paper 4 to consult on increasing Tier 1 capital requirements and reforming the Internal Ratings Based approach for locally incorporated financial institutions. Gareth Vaughan supports higher capital ratios and a level regulatory playing field to mitigate oligopoly risks and reduce reliance on complex financial engineering. Genworth Financial endorses the proposed 16% Tier 1 requirement but advocates for aligning with Basel III by removing the IRB scalar to encourage capital diversification through lenders mortgage insurance.
Share