2022-05-17

Capital review - Requiring banks to list shares locally

The Reserve Bank of New Zealand's Financial Stability Office recommends that the Banking Steering Group consider requiring large local banks to list a modest portion of their shares and debt capital locally to address underdeveloped financial markets. The memorandum argues that shallow local equity and debt markets increase the duration and severity of potential banking crises, justifying more conservative prudential policies until market depth improves. While local equity listing is deemed unlikely to materially deepen the market, local debt listing is viewed as a viable strategy to enhance liquidity and reduce fiscal risks associated with foreign-owned bank subsidiaries.

New Zealand

Reserve Bank of New Zealand

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