Regulatory Alerts2023-06-30
BPR120 Capital Adequacy Process Requirements Revised for the Mutual Capital Instrument
The Reserve Bank of New Zealand issued BPR120 to establish process requirements for banks' compliance with minimum capital adequacy standards, specifically revising the framework to include mutual capital instruments. The document mandates strict notification and legal sign-off procedures for issuing, redeeming, or amending AT1, Tier 2, and mutual capital instruments, while also outlining supervisory responses to capital buffer breaches. Additionally, it sets out accreditation and approval processes for IRB banks regarding the use and modification of internal models for calculating credit and operational risk capital.
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