The Reserve Bank’s capital adequacy framework

Release date
Vol. 76. No. 3. September 2013
Martin Fraser
The Reserve Bank’s operations involve a variety of financial risks, which influence the appropriate amount of capital the Bank should hold. This article outlines some of the approaches used to help formulate advice on the Bank’s capital needs. Recent innovations have been designed to reduce the pro-cyclicality of those estimates, and to encompass a wider range of risks.