Regulatory Alerts2022-05-17
Basel III Regulatory Impact Assessment of Capital Requirements in New Zealand
The Reserve Bank of New Zealand issued this assessment to evaluate the costs and benefits of adopting Basel III capital standards in response to the global financial crisis. The analysis utilizes a cost-benefit model calibrated for New Zealand circumstances, concluding that higher capital ratios are justified with an optimal Tier 1 ratio of approximately 13 percent. The Reserve Bank plans to implement these requirements with transitional arrangements, noting that early adoption yields net benefits despite potential short-term increases in lending rates.
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