Regulatory Alerts2025-12-16
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Comments on RBNZ capital review
Thorsten Beck critiques the Reserve Bank of New Zealand's proposal to lower bank capital requirements, arguing that the current global risk environment and New Zealand's specific vulnerabilities justify maintaining high standards. He warns that reducing capital buffers without a binding leverage ratio or active countercyclical buffers increases systemic fragility and undermines financial stability. Beck further advises against prematurely shifting to internal loss-absorbing capacity for foreign bank subsidiaries until a comprehensive crisis resolution framework is established.
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