Active policy development
We are seeking feedback on some of the consultations listed in this section. Documents for open consultations include instructions on how to have your say, and the closing dates for responses.
You can also find consultations in this section that are closed for responses but where the Reserve Bank is still analysing the feedback that has been provided or where a Bill is being drafted or considered by Parliament.
Open consultations and policy under development
A loan-to-value ratio (LVR) is a measure of how much a bank lends against mortgaged property, compared to the value of that property. Limits on high LVR residential mortgage lending have been in place since October 2013. The restrictions have been revised over time and were removed in response to the economic impact of the COVID-19 pandemic in 2020 and later reinstated at 1 March 2021 at the same level as prior to the onset of COVID-19, with a further tightening of investors’ restrictions taking effect on 1 May 2021.
A key project identified by the Regulatory Stocktake was the restructure of the Banking Supervision Handbook. The Handbook redesign is a major project that is taking place in four stages, beginning in 2016 and extending to early 2019.
The review of the capital adequacy framework aims to identify the most appropriate capital adequacy framework for locally incorporated registered banks, taking into account experience with the current framework and international developments.
Cash system participants and the wider public have been asked for their views about the Reserve Bank taking a more active role in the cash system. The Bank’s ongoing Future of Cash – Te Moni Anamata programme is considering the implications for New Zealanders of falling cash use for every-day transactions, including the impacts on the system that supplies, moves and stores it.
As a complement to the ongoing consultation on new bank capital adequacy framework, the Reserve Bank published a consultation paper seeking feedback on the proposed framework for identifying domestic systemically important banks (D-SIBs).
The Reserve Bank is reviewing its current approach to allowing overseas banks to use restricted words in New Zealand without being registered here as a bank (restricted words include “bank’ and its derivatives such as “banker” and “banking”). This work is intended to provide a more transparent and rigorous framework for dealing with this issue - not to materially change the scope for overseas banks to operate in New Zealand without first being registered here.
Following a public consultation by the Reserve Bank and Ministry of Business, Innovation and Employment, Cabinet agreed in 2018 to a number of legislative amendments designed to remove impediments to compliance with foreign margin requirements for uncleared OTC derivatives. These amendments are included in Part 1 of the Financial Markets (Derivatives Margin and Benchmarking) Reform Amendments Bill, which is currently before Parliament.
The Reserve Bank consulted on the possibility of debt to income (DTI) or other similar serviceability restrictions being added to the toolkit set out in the Memorandum of Understanding on Macroprudential Policy. This is being considered further as part of Phase 2 of the Review of the Reserve Bank of New Zealand Act.
In 2014, the Reserve Bank gathered information from the major banks on the techniques and processes used when producing stress test results. Using insights from this process, the Reserve Bank prepared a discussion document on best practice stress testing methodology.