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The Reserve Bank's application of the Basel III capital requirements for banks

Felicity Barker

Capital requirements are a key element of the prudential framework the Reserve Bank applies to banks operating in New Zealand. The Reserve Bank largely follows international standards in implementing bank capital requirements. In 2010 there was a significant reissue of the international banking capital standards, known as Basel III. The Reserve Bank has implemented the main elements of these standards in New Zealand. This article explains the rationale for the Basel III capital requirements, their significant features and implementation in New Zealand.