2025-12-21

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Review of key capital settings questions and answers

The Reserve Bank of New Zealand has finalized decisions to reduce capital requirements for deposit takers, aiming to lower borrowing costs and enhance lending capacity. The new framework introduces Loss Absorbing Capacity for the largest banks while eliminating Additional Tier 1 capital and adjusting risk weights for smaller institutions. These changes align New Zealand's prudential standards more closely with international peers, particularly Australia, to support financial stability and economic efficiency.

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New Zealand

Reserve Bank of New Zealand

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