Regulatory Alerts2022-05-17
Reserve Bank of New Zealand Connected Exposures Policy BS8
The Reserve Bank of New Zealand issued document BS8 to establish standard registration conditions for locally incorporated banks regarding exposures to connected persons. The policy mandates that capital nature advances be deducted from Tier 1 capital and imposes rating-contingent limits on aggregate credit exposures, capped at a maximum of 125% of Tier 1 capital. It further defines substantial interest, specifies approved credit rating agencies, and requires that all connected exposures be offered on terms no more favorable than those given to non-connected persons.
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