Regulatory Alerts2022-05-17
Reserve Bank of New Zealand Liquidity Requirements for Locally Incorporated Banks
The Reserve Bank of New Zealand issued final liquidity regulations for locally incorporated banks to address insufficient liquid asset holdings and reliance on short-term overseas funding. The framework introduces mandatory qualitative governance standards and three quantitative metrics, including two short-term mismatch measures and a core funding ratio, effective from 1 April 2010. These requirements aim to strengthen banks' resilience against liquidity crises and reduce systemic moral hazard by aligning domestic rules with international best practices.
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