Liquidity: branches

Background

In October 2009 the Reserve Bank published a near-final version of its liquidity policy for registered banks (BS13), and imposed new conditions of registration on all but one of the locally-incorporated banks to bring the requirements of the policy into effect from 1 April 2010.

We announced at the time that we would finalise the details of the liquidity requirements for the other registered banks by the end of 2009. However, liquidity risk in branches of overseas banks raises a few distinct issues compared to that in locally-incorporated banks, and some further work has been needed to consider how to adapt our liquidity policy to the overseas bank branches in New Zealand. Until recently, that work has been crowded out by competing policy priorities.

The necessary analysis is now complete and the Bank is seeking views on our proposed approach for branches, with a view to completing the roll-out of our liquidity policy to all registered banks, tailored as appropriate.

Consultation Paper: Extending Reserve Bank Liquidity Policy BS13 to overseas bank branches

In January 2012 the Reserve Bank issued a consultation paper (PDF 220KB) setting out its proposals on how its liquidity policy requirements should be adapted to apply to New Zealand branches of overseas banks. The deadline for comments was 30 March 2012.