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Capital Instruments for Mutual Banks

We are seeking feedback on the Exposure Drafts of Banking Prudential Requirements to incorporate a new capital instrument than can be issued by mutual banks.

About the consultation

In December 2019 we published the final decisions from the Capital Review which focused on improving the quality and quantity of capital banks are required to hold. One unresolved issue from the review was to consider developing a capital instrument for mutual banks which could qualify as Common Equity Tier 1 (CET1) capital.

Currently, mutual banks in New Zealand are not able to issue such instruments without compromising their mutual status.

In March 2022 we published a consultation paper seeking stakeholder’s views on 2 policy options to provide mutual banks with an instrument which could qualify as CET1 capital.

Decisions have now been made and are available on our website.

Read more about the Capital Review decisions

To incorporate the new instrument into our prudential capital framework, we have published Exposure Drafts of proposed amendments to Banking Prudential Requirements documents.

How to make a submission

You can send your submissions and enquiries to [email protected] with the subject line: Mutual Capital Instrument Exposure Draft December 2022.

Please note, the disclosure on the publication of submissions is detailed in the consultation document.

When you can submit your responses by

You can have your say from 7 December 2022 to 31 March 2023.

Past consultation information

We are seeking feedback on policy options for mutual banks to issue capital instruments.

In December 2019 we published the final decisions from the Capital Review which focused on improving the quality and quantity of capital banks are required to hold. One unresolved issue from the review was to consider developing a capital instrument for mutual banks which could qualify as Common Equity Tier 1 (CET1) capital.

Currently, mutual banks in New Zealand are not able to issue such instruments without compromising their mutual status.

The consultation paper seeks stakeholder’s views on two policy options to provide mutual banks with an instrument which could qualify as CET1 capital.

How to make a submission

We are inviting submissions on this consultation from all interested parties until 10 June 2022.

Please note the disclosure on the publication of submissions detailed in the consultation document.

Address submissions and enquiries to [email protected] with the subject line: Mutual Capital Instrument Consultation Paper March 2022.

Consultation paper

Developing options for mutual banks to issue capital instruments which qualify as CET1 capital (PDF 998 KB)