Regulatory Alerts2022-05-17
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Capital review - The countercyclical capital buffer strategy
The Reserve Bank of New Zealand issued this memorandum to evaluate strategies for setting the countercyclical capital buffer (CCB) to inform an ongoing capital review. The document compares a late strategy, which raises the CCB only when systemic risks are high, against an early strategy that maintains a higher buffer during normal financial cycles. It assesses both approaches based on their ability to enhance banking resilience, mitigate deleveraging during crises, and ensure international reciprocation.
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