RBNZ calls for consultations

WELLINGTON: The central bank called yesterday for consultations on its review of capital requirements to counter risk to the country’s banking sector, saying it retained an open mind about any new rules.

“However, in broad terms our aim is to agree a capital regime that maintains a very high level of confidence in the solvency of the banking system, while avoiding unnecessary economic inefficiency,” said the Reserve Bank of New Zealand (RBNZ).

RBNZ deputy governor Grant Spencer announced the yearlong review last month to ensure regulations were appropriate in light of international rules and the high risk of any downturn in the property sector to New Zealand’s financial system.

Internationally, regulators have developed new rules known as “Basel III” to make the global banking system more resilient following the 2008 crisis. Reuters