RBNZ: There will be delays to the start date for increases in bank capital

The Reserve Bank of New Zealand has said that there will be delays to the start date for increases in bank capital.

The increase in the prudential capital buffer will not begin until July 2022 to allow banks continued headroom to respond to effects of the covid-19 pandemic.

The central bank remains committed to increasing capital requirements in the medium-term to underpin financial stability

Other aspects of capital reforms will proceed from 1 July 2021, including new rules around capital instruments.

In December, the reserve bank will consult about re-instating loan-to-value ratio restrictions on high-risk lending from 1 March 2021.

The RBNZ has written to insurers to advise it has updated expectations on dividends.

The RBNZ expects insurers will only make dividend payments if it is prudent to do so, having regard to their own stress testing and elevated risks.

More to come...