Regulatory Alerts2022-05-17
Regulatory Impact Assessment of pre-positioning for Open Bank Resolution
The Reserve Bank of New Zealand requires locally incorporated banks with retail deposits over $1 billion to pre-position their internal systems to facilitate the Open Bank Resolution policy. This mandate enables statutory managers to temporarily close failing banks, freeze unsecured liabilities, and restore transactional access by the next banking day to minimize economic disruption. The assessment justifies this requirement by demonstrating that pre-positioning reduces the likelihood of taxpayer-funded bailouts and mitigates the systemic costs associated with bank failures.
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