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 conditions of registration for locally incorporated banks regarding exposure to connected persons. The policy mandates that aggregate credit exposures to connected persons must not exceed a rating-contingent limit based on the bank's credit rating, while capital nature advances are deducted from Tier 1 capital. Additionally, the document defines substantial interest and connected persons, requires exposures to be on no more favourable terms than those for non-connected persons, and sets a gross exposure cap of 125% of Tier 1 capital.
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