Regulatory Alerts2022-05-17
Consultation Paper: Proposed changes to the bank capital adequacy framework (internal models based approach) (BS2B)
The Reserve Bank of New Zealand proposes amendments to the BS2B capital adequacy framework to address risks in farm lending and loan maturity for internal models banks. The changes introduce a specific farm lending subclass with prescribed minimum loss-given-default estimates and remove the concessional firm size adjustment due to sector homogeneity. Additionally, the proposal removes the contractual maturity input from the corporate capital equation and implements minor editorial clarifications to BS2B and BS8.
Share