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Experts support capital review: RBNZ

The Reserve Bank says independent international experts support its plan to introduce strict new capital rules for banks.

Tuesday, October 1st 2019, 10:48AM

The RBNZ has published opinions from three international banking and finance experts who support the proposals.

Dr James Cummings of Sydney University, Professor Ross Levine of the University of California, and Professor David Miles of Imperial College, London, have "signalled their support with the direction in the capital review", said RBNZ deputy governor Geoff Bascand. 

Cummings said the proposals were based on "sensible analysis", while Levine said the RBNZ analysis is "balanced".

Miles said "rather than being based on a view of risk that is excessively risk-averse, the analysis is closer to risk neutrality".

The RBNZ proposals, if introduced in their current form, will force banks to hold more capital aside as a safety buffer. Estimates suggest banks will need to raise more than $20 billion.

The rules would come into effect in April 2020, with a transition period of several years.

Banks have hit out at the plans and say they will be forced to increase interest rates on home loans and other products. 

The RBNZ is doubling down behind the proposals. 

Bascand said the independent experts "all acknowledged the quality of analysis underpinning our proposals, the transparency of our process, and the care we have taken to consider the points raised by submitters during the consultation process to date”.

The plans are in a consultation period, with responses and final decisions published in the first week of December. 

 

Tags: banks interest rates Lending mortgages RBNZ Reserve Bank

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ANZ 5.19 4.05 4.05 4.49
ANZ Special - 3.55 3.55 3.99
ASB Bank 5.20 3.89 4.05 4.39
ASB Bank Special - 3.39 3.55 3.89
BNZ - Classic - 3.49 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.54 3.54 3.69
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank ▼5.20 ▲4.20 4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▲3.45 3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.39 3.45 3.89
Sovereign 5.30 ▼3.89 ▼4.05 ▼4.39
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The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.39 3.45 3.99
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Last updated: 9 December 2019 9:02am

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