Review of mortgage bond collateral standards

Status:Consultation closed

Consultation period: 2017-2019

12 August 2019

The Reserve Bank sought feedback on its proposal to introduce a high grade residential mortgage backed securities framework through Residential Mortgage Obligations (RMO).

The formal written consultation closed on 8 March 2019.

The Reserve Bank has published a summary of the feedback received.

Submissions for publication

The Reserve Bank received 6 submissions as part of the second consultation on RMO. On 12 August the submissions were published except where organisations asked that they not be publicly released.


15 February 2019

The Reserve Bank is extending the consultation period for the proposed new mortgage bond standard.

Following requests from stakeholders, the Reserve Bank has extended the consultation period by two weeks.

The consultation closes at 5.00pm on Friday 8 March 2019.

Submissions and a response to submissions will be published soon after consultation closes. The timeline for implementation will be updated when final decisions are made. The Reserve Bank is proposing a five-year implementation timeline.

The Reserve Bank has also published a draft template to assist banks to provide loan level data under the proposed mortgage bond standard.


13 November 2018

The Reserve Bank is proposing a new mortgage bond standard aimed at supporting confidence and liquidity in the New Zealand markets.

This follows an initial consultation in November 2017 and ongoing discussion with issuers and investors over the past year.

The new mortgage bond standard aims to:

  • reduce contingency risks for the Reserve Bank as a lender of last resort and ensure financial intermediaries supply sufficient high quality and liquid assets; and
  • provide issuers and investors with an additional funding and investment instrument, supporting the development of deeper capital markets.

The consultation paper summarises the changes proposed in response to the key issues raised by industry and sets out the revised mortgage bond standard in an exposure draft for final consultation.


22 May 2018

The Reserve Bank sought feedback on the terms under which it should accept mortgage bonds as collateral and the proposed new standard in Residential Mortgage Obligations. The formal written consultation closed on 9 March 2018.

The Reserve Bank has published a summary of the feedback received.

Summary of submissions - Review of mortgage bond collateral standards (PDF 518KB).

The Reserve Bank plans to follow up with stakeholders on the key issues raised. The bank also expects to consult on a revised proposal with the aim of finalising the mortgage bond collateral policy review by the end of the year.

Submissions for publication

The Reserve Bank received 14 responses as part of the consultation. On 22 May the submissions were published except where organisations asked that they not be publicly released.


17 November 2017

The Reserve Bank is proposing an enhanced mortgage bond standard aimed at supporting confidence and liquidity in the financial system. 

This follows a review of domestic and international mortgage bond collateral standards. 

The Bank believes the proposed new collateral standard would:

  • improve the risk position of the Reserve Bank by promoting the use of higher quality and potentially more liquid, mortgage bonds as collateral in the Bank’s lending operations;
  • support New Zealand market lenders by creating an additional funding instrument for residential mortgages; and
  • promote a deeper capital market through the availability of simple, comparable and transparent mortgage bond instruments.

The Bank is seeking feedback on the terms under which it accepts mortgage bonds as collateral and the proposed new Residential Mortgage Obligations (RMO) standard.

The consultation closed on Friday 9 March 2018.