Regulatory Alerts2022-05-17
BS8 Connected Exposures Policy
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 restricts aggregate credit exposures to a rating-contingent limit based on the bank's credit rating. It further defines connected persons, substantial interests, and credit exposures while prohibiting lending on more favorable terms than those offered to non-connected persons.
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