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Capital Instruments for Mutual Banks

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

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.