RBNZ delays new capital rules

The central bank has taken steps to protect the financial system amid the ongoing pandemic, and has delayed the new capital rules by one year, until July 2021. 

The decision comes alongside the RBNZ's move to cut the official cash rate by 75 basis points this morning. 

RBNZ deputy governor Geoff Bascand said: “To support credit availability, the Bank has decided to delay the start date of increased capital requirements for banks by 12 months – to July 1, 2021. Should conditions warrant it next year, the Reserve Bank will consider whether further delays are necessary.”

“We are taking this action now to help support lending in the economy at a time when there is a lot of uncertainty. The Reserve Bank’s expectation is that banks will utilise this flexibility to maintain lending to households and businesses. Banks have significant buffers above current regulatory minimums, and we encourage them to use them,” Bascand said.