Regulatory Alerts2022-05-17
Capital review - Inclusion of leverage ratio requirements in ratio paper
The Reserve Bank of New Zealand proposes including leverage ratio requirements in the Capital Review Ratio Paper to align with Basel and APRA standards. The document recommends consulting on a preferred option that mandates both disclosure and a minimum leverage ratio, citing low compliance costs and international harmonization benefits. This approach aims to mitigate systemic deleveraging risks and act as a backstop to the risk-based capital framework while maintaining risk sensitivity.
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