2019-05-21
Added · Updated
The Reserve Bank of New Zealand issues this framework to establish the principles and processes for using macroprudential instruments to mitigate boom-bust cycles. The policy aims to reduce the likelihood and severity of financial crises by requiring banks to hold additional capital and liquidity buffers while restricting household lending through loan-to-value ratios. This approach complements baseline prudential requirements to enhance financial system resilience and prevent the amplification of economic downturns.
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