WELLINGTON, Dec. 17 (Xinhua) -- New Zealand's central bank cut capital requirements for banks and deposit takers by around 5 billion NZ dollars (2.89 billion U.S. dollars) on Wednesday to support competition and credit growth.
The new settings, following a review launched earlier this year, reflect the central bank's recalibrated risk appetite, the introduction of the Depositor Compensation Scheme, and more intensive supervision, said Rodger Finlay, chair of the Reserve Bank of New Zealand (RBNZ) Board.
RBNZ Governor Anna Breman said the modernized framework is "simple, strong, proportionate and efficient," and will lower funding costs for deposit takers, benefiting borrowers through reduced lending rates.
The updated package aligns capital instruments for major banks more closely with Australian standards and provides proportionately larger relief for small and mid-sized lenders, Breman said.
Full implementation under the new Deposit Takers Act is planned by 2028, with an accelerated rollout beginning early next year, the RBNZ said.
Finance Minister Nicola Willis said in a statement that the reduction in capital requirements would improve competition and support lending to priority sectors such as agriculture. ■
