The Reserve Bank of New Zealand (RBNZ) has decided to delay its regulatory initiatives for at least six months to help banks and insurers address the COVID-19 (coronavirus) outbreak.
The RBNZ announced that it would delay the start date of new bank capital rules by 12 months to July 01, 2021, to help banks provide an additional $47 billion of credit. It also extended the transition period for its revised outsourcing policy to October 01, 2023, rather than 2022.
RBNZ Deputy Governor Geoff Bascand offered assurances that they have been working closely with other agencies to ensure that the country’s financial markets will continue to run effectively.
“In such uncertain times, it is important that firms have as much capacity as possible to deal with critical problems as they arise,” Bascand said, as reported by Interest.co.nz.
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The RBNZ also decided to defer its review of the Insurance Act 2010, bank liquidity thematic review, as well as the stress testing framework and planned bank stress tests.
It also delayed cyber resilience guidelines for all regulated entities, standard terms for residential mortgage obligations, future of cash – standards for banknote-processing machines, as well as revisions to banks’ disclosure of regulatory breaches and processes for approving banks’ internal capital adequacy models for credit risk.
“It makes sense for regulators to free up financial institutions to focus on matters such as helping customers through financial or other stress or increasing their degree of monitoring and managing their own, most urgent risks. Some regulatory initiatives require regular industry-wide workshops, and these are not feasible at the moment,” Bascand concluded.