RBNZ consults on capital rules for housing loans

The Reserve Bank of New Zealand is undertaking a review of bank capital adequacy requirements for residential mortgage loans (housing loans).

On Tuesday 26th of March the Reserve Bank released a consultation paper on a proposed technical adjustment to the correlation factor of the Basel equation that internal models Banks use to calculate their capital requirements.

Specifically, the Reserve Bank is considering increasing the correlation factor for high loan-to-value ratio ( LVR) housing loans, thereby increasing capital adequacy requirements for high LVR Loans for internal models banks ... READ MORE

Released by Minter Ellison Rudd Watts - 27 March 2013