Regulatory Alerts2023-01-23
BPR210: Connected Exposures Policy Exposure Draft
The Reserve Bank of New Zealand issues this policy to require locally incorporated registered banks to monitor and limit credit exposures to connected persons, thereby addressing conflict of interest risks and ensuring financial system stability. The document establishes rating-contingent aggregate exposure limits based on Tier 1 capital and mandates that transactions with connected persons must not be on more favorable terms than those with non-connected persons. It further defines connected persons, specifies measurement principles for on- and off-balance sheet exposures, and outlines eligible credit risk mitigations and director accountability requirements.
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