Just one week remains for people to make a submission on the Reserve Bank proposals to make the banking system safer by increasing minimum bank capital.
The Reserve Bank is consulting on proposals to increase the amount of capital banks must have. If implemented, the proposed change would ensure that bank shareholders have a meaningful stake in their bank, so that they absorb a greater share of losses their bank might face during financial and economic shocks.
“The soundness and efficiency of our banking system is one of the most critical factors in ensuring New Zealand’s sustainable economic wellbeing. This is an important policy and we welcome views from all quarters,” said Reserve Bank Deputy Governor and General Manager Financial Stability Geoff Bascand.
Consultation closes at the end of this week. So far, the Reserve Bank has received 90 formal written submissions from the public, industry groups, and banks. The Reserve Bank has also heard from stakeholders through workshops and meetings. Submissions will be made public in June.
Final decisions on the proposals are expected in the third quarter of 2019, after submissions and other evidence have been analysed.
- Safer banks = safer society (PDF 680KB)
- Video: What is capital adequacy?
- Non-technical summary: How much capital is enough? (PDF 1.45MB)