Improved rules for banks and NBDTs

18 December 2015

Improved rules for banks and NBDTs

The Reserve Bank today published the conclusions of its stocktake of the prudential regulations that apply to banks and non-bank deposit takers (NBDTs).

The stocktake aims to enhance the efficiency, clarity and consistency of the rules for banks and NBDTs, and there was public consultation from July to September 2015.

A key matter being considered for banks is the content and the frequency of disclosure statements that banks are required to publish. In particular, changes were proposed to the current requirement that banks must prepare “off-quarter” disclosure statements.

Deputy Governor Grant Spencer said: “Disclosure is fundamental to good market discipline, which is a key pillar of our supervisory approach for banks. We believe that locally incorporated banks must provide some form of quarterly disclosure, but could do so in a more timely and accessible manner, and at lower cost to the banks. We are now looking into the possibility of a new ‘dashboard’ mechanism for providing these off-quarter disclosures.

“Because this dashboard concept arose from further reflection on how to best address several issues, we have yet to consult on it. We’ll develop a more detailed proposal for the dashboard in discussion with banks and other interested parties.”

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.

“In the follow-up implementation work still required, we look forward to continuing the collaboration with industry and others that has worked so well during the stocktake,” Mr Spencer said.

More information:

• Summary of submissions and policy decisions for registered banks

• Summary of feedback and responses on the NBDT Industry Update

• Consultation Document: registered banks

• Non-bank Deposit Takers Industry Update

• Regulatory Stocktake terms of reference
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