Regulatory stocktake

Release date
19/10/2018

Status: The Regulatory Stocktake is complete. Follow on implementation work by the Bank is under way.

The Reserve Bank published the conclusions of its stocktake of the prudential requirements for banks and non-bank deposit takers (NBDTs) in December 2015.

The objective of the stocktake was to identify ways to improve the efficiency, clarity and consistency of the regulatory requirements in those sectors. This has led to several strands of work to implement improvements identified in the stocktake.

Information on this work up to September 2016 is covered below. Since then, information on a number of Stocktake follow-ons has been published on separate dedicated webpages, available from Consultations and policy developments for banks.

Follow-on implementation work

On 23 September 2016 the Reserve Bank published a consultation document on the proposed Dashboard approach to quarterly disclosure by locally incorporated banks (PDF 1MB). The Dashboard would involve publication on the website of key information on locally incorporated banks. By presenting this information in one place and in a standardised format, the Dashboard aims to enhance market discipline by making the information more accessible and facilitating comparisons across banks. The consultation document also seeks feedback on various other related matters (including consequential issues arising out of our separate decision to remove off-quarter disclosure statements for branches once the necessary requirements for private reporting to the Reserve Bank are in place). Submissions on the consultation document close on 15 December 2016.

On 22 September 2016 the Reserve Bank published a summary of the submissions feedback (100KB) received to its consultation paper seeking views on changing its current approach to publishing submissions on consultations (PDF 152KB). The Reserve Bank will begin publishing individual submissions for all consultations that begin on and after 22 September 2016 where consent to do so is granted by submitters.

On 27 June 2016, the Reserve Bank published an updated version of the Banking Supervision Handbook document Guidelines on Anti-Money Laundering and Countering Financing of Terrorism (BS5) (PDF 71KB). This follows a consultation with banks on the proposed update. A feedback statement (PDF 142KB) to the consultation has also been published.

Stocktake conclusions

On 18 December 2015, the Reserve Bank published the conclusions of the project in two parts:

  1. The summary of submissions and policy decisions (PDF 625KB) on the Consultation Document on the Prudential Requirements Applying to Registered Banks.
  2. The summary of feedback from NBDT industry bodies and Reserve Bank responses (PDF 59KB) on the NBDT Industry Update.

A key matter considered for banks was the content and the frequency of disclosure statements that banks are required to publish. The work on this issue has concluded that disclosure is fundamental to good market discipline, which is a key pillar of the Bank’s supervisory approach. While the Bank has concluded that locally incorporated banks must provide some form of quarterly disclosure, it believes they could do so in a more timely and accessible manner, and at a lower cost to banks. As part of the follow-up implementation work, the Bank will consult on the possibility of a new ‘dashboard’ mechanism for providing these off-quarter disclosures.

The consultation found broad support for most of the Bank’s specific proposals such as improving the drafting and layout of the documents that set out prudential requirements for banks. Submissions were also broadly supportive of a number of technical changes that were proposed in specific prudential requirements. The Bank also received useful feedback on several matters relating to the prudential requirements for NBDTs, and will carry out further work on these. As a result of the stocktake, the Bank will enhance the transparency of its policy-making process by strengthening the communication around it.

Expert Panel

The Reserve Bank formed an "Expert Panel" of Individuals with experience in a range of relevant fields, to help test ideas and provide a broader range of perspectives as the Regulatory Stocktake progressed.

The Panel met five times in total between October 2014 and October 2015.

Members of the Panel

Name

Title

Organisation

Godfrey Boyce

National Managing Partner

KPMG

Peter Hall

Investor

Ice Angels

Simon Jensen

Partner

Buddle Finlay

Martin Philipsen

CEO

Fundit.co.nz

John Yeabsley

Senior Fellow

NZIER

Background

Summary of submissions and policy decisions (PDF 625KB) (December 2015) on the Consultation Document (PDF 499KB) on potential changes to the prudential regime for banks (July 2015)

Summary of feedback from NBDT industry bodies and Reserve Bank responses (PDF 59KB) (December 2015) on the Industry Update for NBDTs (PDF 101KB) (July 2015)

The Regulatory Stocktake: An Update, A speech delivered to the New Zealand Bankers Association by Toby Fiennes, Head of Prudential Supervision (July 2015)

Matters currently under consideration as part of the Regulatory Stocktake (PDF 102KB) (March 2015)

Terms of Reference for the Regulatory Stocktake (PDF 165KB) (July 2014)

Taking Stock of Financial Regulation, A speech delivered to the New Zealand Bankers Association by Grant Spencer, Deputy Governor (July 2014)