RBNZ relaxes capital requirements, allows preference shares, extends phase-in

Thu, 05 Dec 2019

The Reserve Bank has significantly relaxed its bank capital requirements by no longer insisting all the additional capital must be equity and by extending the phase-in period to seven years from the original five.The big four Australian-owned banks will still have to lift their tier 1 capital from a minimum 8.5 percent of risk-weighted assets to 16 percent. However 2.5 percent of that can be preference shares, rather than all common equity as originally proposed.That will mean the big four banks will need to raise current common equity from an...

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