Updated Capital Review Implementation Timeline as at 6 May 2025

UNCLASSIFIED
UNCLASSIFIED
Updated Capital Review Implementation Timeline As at 6 May 2025 The table below details elements of the Capital Review that were implemented during 2021-2022:
Completed on 31
March 2021

• Consultation on exposure drafts of revised Banking Supervision Handbook,
  including revised definition of capital instruments and framework for distribution restrictions and supervisory actions once a bank enters its prudential capital buffer. 17 June 2021 • Revised Banking Supervision Handbook published (Banking Prudential Requirement documents), along with our responses to submissions received. 1 October 2021 • New Banking Prudential Requirements came into effect, including new processes for the recognition of capital instruments. 1 January 2022
• Derecognition of non-qualifying AT1 and Tier 2 instruments began
• Output floor on IRB exposures set at 85%
• For IRB banks, Sovereign and Bank exposures move to Standardised
  approach
  22 February 2022 • Consultation launched on IRB banks disclosing IRB and Standardised capital calculations (dual reporting) 2022
• Consultation on Standardised Measurement Approach for Operational Risk
  (H1 or Q3 2022)
• Consultation on the operational framework for the countercyclical capital
  buffer (H1 2022)
• Dual reporting comes into effect (Q3 2022)
  The phasing of the implementation of the increase in capital buffers and the IRB scalar is shown below:
  1 July 20221
• D-SIB buffer set at 1%
  1 October 2022 • IRB scalar increases from 1.06 to 1.2 1 July 2023 • D-SIB buffer increases from 1% to 2% 1 July 2024 • Minimum Tier 1 capital requirement increases from 6% to 7%
• Minimum Total capital requirement increases from 8% to 9%
  1 July 2025 • Conservation buffer increases from 2.5% to 3.5% The review of key capital settings will be completed by the end of 2025 and may include decisions that impact the capital buffer increases from 1 July 2026 onwards. 1 July 2026 • Conservation buffer increases from 3.5% to 4.5% 1 July 2027 • Conservation buffer increases from 4.5% to 5.5% 1 July 2028 • Countercyclical capital buffer set at 1.5%
• Non-qualifying AT1 and Tier 2 instruments fully derecognised
  1 Changes take effect from this date, meaning the 1% D-SIB buffer would be reflected in D-SIB banks’ reporting, e.g. on the RBNZ Dashboard, for 30 September 2022 (not 30 June 2022). This logic also applies to the IRB scalar and other capital ratio changes.