Regulatory Alerts2022-05-17
Summary of submissions and final policy decisions on the Consultation Paper: Review of bank capital adequacy requirements for housing loans
The Reserve Bank of New Zealand issued final policy decisions on the second stage of its review of bank capital adequacy requirements for residential mortgages, incorporating feedback from eleven stakeholder submissions. The regulator decided to harmonize Loan-to-Value Ratio calculations by adopting the BS2B definition, which excludes most unsecured lending, while also clarifying valuation standards and refining the distinction between residential and commercial property exposures. These regulatory changes to the Banking Supervision Handbook are scheduled to take effect on 30 June 2014 following a subsequent consultation on the draft wording.
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