Regulatory Alerts2022-05-17
Guidelines on a Bank's Internal Capital Adequacy Assessment Process (ICAAP)
The Reserve Bank of New Zealand issued these guidelines to regulate the Internal Capital Adequacy Assessment Process (ICAAP) for registered banks under the Reserve Bank of New Zealand Act 1989. The document mandates that banks establish, operate, and maintain an ICAAP to ensure adequate capital covers all material risks, including those outside Pillar 1 requirements. It requires robust board oversight, comprehensive risk documentation, forward-looking stress testing, and regular independent reviews to align capital levels with the bank's risk profile and strategic objectives.
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