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Exposure draft for Capital Review implementation changes

About the consultation

This consultation is being presented through ‘exposure drafts’ of revised documents from the Banking Supervision Handbook, which set out the details of the policy framework and rules that apply to registered banks in New Zealand.  We have provided details of these changes in the consultation paper.

The exposure drafts also form part of the roll out of the replacement for the Banking Supervision Handbook. It is being restructured and renamed as 'Banking Prudential Requirements' to reorganise and clarify the existing Handbook documents.

Read more about the restructure of the Banking Supervision Handbook

This was one of the main areas for improvement identified during a Regulatory Stocktake that the we undertook in 2015. We have given banks drafts of these restructured documents throughout the period 2016 to 2019 as part of a working group process.

Consultation documents and explanatory material

As part of this consultation, there are a number of documents that we are providing to help stakeholders provide feedback and navigate the exposure drafts:

2-page Executive Summary of key issues (PDF 160KB)
Consultation paper describing topics and key questions for stakeholders.

Additional explanatory material for the draft BPR documents, outlining in more detail the changes that have occurred and particular drafting approach in the BPRs:

Explanatory notes for BPR100, 110, and 120 (PDF 148KB)
Explanatory notes for BPR140 (PDF 101KB)
Explanatory notes for BPR001 (PDF 65KB)
Explanatory notes for BPR130-160 (excluding BPR140) (PDF 345KB)
Correspondence tables to show mapping of the current Banking Handbook Documents to the new BPR documents (PDF 216KB).

Exposure drafts of the new Banking Prudential Requirements

The drafts of the Banking Prudential Requirements (BPRs) are presented below:

BPR100: Capital adequacy (PDF 577KB)
BPR110: Capital definitions (PDF 643KB)
BPR120: Capital adequacy process requirements (PDF 630KB)
BPR130: Credit risk RWAs overview (PDF 458KB)
BPR131: Standardised credit risk RWAs (PDF 870KB)
BPR132: Credit risk mitigation (PDF 701KB)
BPR133: IRB credit risk RWAs (PDF 847KB)
BPR134: IRB minimum system requirements (PDF 591KB)
BPR140: Market risk (PDF 497KB)
BPR150: Standardised operational risk (PDF 375KB)
BPR151: AMA operational risk (PDF 471KB)
BPR160: Insurance, securitisation, and loan transfers (PDF 475KB)
BPR001: Glossary (PDF 475KB)

There are also existing policy documents that we need to amend to incorporate the changes required to implement Capital Review decisions and the new BPRs. These are marked up and linked below:

Disclosure Order in Council for Locally Incorporated Banks
Disclosure Order in Council for Branches
BS1: Statement of Principles
BS19: LVR Policy (not currently in force)