Capital adequacy: residential mortgage loans for investment property, reverse mortgages, definition of capital and requirements for capital recognition and repayment.
We have finalised changes to the capital adequacy requirements for residential mortgage loans for investment properties as part of the second stage of the housing review, changes to the capital adequacy requirements for reverse mortgage loans, changes to the definition of capital, and changes to the process requirements banks must meet to recognise instruments as regulatory capital or repay a capital instrument.
These initiatives are detailed in information relating to the capital adequacy framework in New Zealand. The definition of owner-occupied property provides examples of property that is considered to be owner-occupied for the purposes of BS2A, BS2B and BS19. The final rules are in updated versions of BS2A, BS2B, BS8, and BS16 of the Banking Supervision Handbook.
Definition of owner-occupied residential property (PDF 70KB)
BS2A: Capital adequacy framework (standardised approach) (PDF 700KB)
BS2B: Capital Adequacy Framework (internal models based approach) (PDF 1.2MB)
BS8: Connected Exposures Policy (PDF 70KB)
BS16: Application requirements for capital recognition or repayment and notification requirements in respect of capital (PDF 188KB)