WELLINGTON, Aug. 25 (Xinhua) -- The Reserve Bank of New Zealand (RBNZ) launched consultation on easing capital requirements for deposit takers on Monday.
The review proposed notable reductions from the 2019 framework to balance financial stability with fostering competition and economic efficiency.
According to the consultation paper, two options for overall capital ratios have been presented, both reducing current capital demands substantially compared with 2019 decisions.
The RBNZ also proposes lowering the minimum capital required for deposit takers from 30 million NZ dollars (17.6 million U.S. dollars) to 5 million NZ dollars (2.93 million U.S. dollars) to reduce barriers to entry.
The changes come amid concerns that the previous capital settings were more conservative than international peers, potentially restricting competition and economic growth.
The options "would reduce requirements for smaller deposit takers more than for larger deposit takers: meaning a more competitive environment for smaller players to compete with the big Aussie banks," said Finance Minister Nicola Willis, welcoming the review.
The review follows the introduction of the Deposit Takers Act 2023 and a new Financial Policy Remit stressing efficiency and competition.
Consultation on the proposals runs until Oct. 3, with final decisions expected by year-end after independent expert review. ■