Hi Guys
I think that the NZ Banks are now in a general tightening of lending out money due to:
Regards
I think that the NZ Banks are now in a general tightening of lending out money due to:
Implementation of the Basel II capital adequacy framework in New Zealand
Basel II is a new international framework for determining how much capital banks should be required to hold, taking account of the risks that they take. As with the original Basel capital framework, Basel II was developed by the Basel Committee on Banking Supervision.
Latest developments
In February 2008, the Reserve Bank finalised the Capital Adequacy Framework (Internal Models Based Approach) BS2B (PDF 574KB) document that sets out the internal models based approach to the Basel II capital adequacy framework. A summary of the main points made in submissions on the draft version of BS2B and the Bank's responses thereto are set out in the document: Response to Submissions from Consultation on Internal Models Based Approach (PDF 33KB)
The Framework
The Basel II framework is set out in Basel II: International Convergence of Capital Measurement and Capital Standards: A Revised Framework on the website of the Bank for International Settlements.
Basel II is made up of three Pillars. Pillar 1 involves the calculation of minimum capital requirements to cover credit risk, market risk and operational risk. Pillar 2 covers capital for other risks and overall capital adequacy, and Pillar 3 covers disclosure.
For an introduction to Basel II and the Reserve Bank’s approach to its implementation in New Zealand, read A new capital framework (PDF 101KB) by Andrew Yeh, James Twaddle and Mike Frith (published in the Reserve Bank Bulletin, September 2005).
Implementation in New Zealand
The Reserve Bank is basing its bank capital adequacy requirements on Basel II, adapted where relevant to take account of the unique features of the New Zealand financial system.
Basel II will be implemented in New Zealand from the first quarter of 2008. Banks can elect to use the standardised approach or the internal models approach to calculate their capital requirements under Basel II.
Standardised approach
Pillar 1 standardised approach: Banks using the standardised approach under Pillar 1 will be subject to conditions of registration that will require capital adequacy to be calculated using the framework set out in the document Capital Adequacy Framework (Standardised Approach) BS2A - November 2007 (PDF 324KB).
A summary of the main points made in submissions on the draft version of BS2A and the Bank's responses thereto are set out in the document: Response to Submissions from Consultation on Standardised Approach (PDF 26KB)
Internal models based approach
In March 2006, the Reserve Bank published its application requirements for banks seeking accreditation to implement from January 2008 the internal models based approach – i.e internal ratings-based approaches to credit risk, and advanced measurement approach to operational risk. See
Basel II: Application requirements for banks seeking accreditation to use the internal-models approaches – March 2006 (PDF 142KB)
Reserve Bank also released an exposure draft Basel II: IRB national discretions – March 2006 (PDF 79KB), outlining the Reserve Bank's preliminary thinking on how to treat the national discretions available under the Basel II internal ratings-based approach to credit risk.
On 10 December 2007 the Reserve Bank announced that four banks had been accredited to adopt the internal models based approach under the Basel II banking supervisory regime.
The banks that were accredited to use internal models for credit and operational risk from the first quarter of 2008 are ANZ National Bank Limited, ASB Bank Limited, and Westpac New Zealand Limited. In addition, the Bank of New Zealand was accredited to use internal models for operational risk from the first quarter of 2008. The Bank of New Zealand is expected to apply for accreditation of its credit risk models during 2008.
In order for these four banks to retain their accreditation status they must comply with a number of on-going accreditation requirements. Some of these requirements are of a transitional nature, recognising that there is some way to go to fully embed the Basel II regime. In particular, there will be a transitional requirement to maintain capital at a level no less than 90 percent of the previous Basel I capital requirement. Other requirements relate to specific risk parameters to be used in some risk models, and improvements to be made to the banks’ risk models over time.
Banks using the internal models based approach for determining regulatory capital requirements will be required to calculate their regulatory capital requirements using the framework set out in the document the Capital Adequacy Framework (Internal Models Based Approach) BS2B (PDF 574KB). The Reserve Bank finalised this document in February 2008 taking into account submissions received on the draft document. A summary of the main points made in submissions on the draft version of BS2B and the Bank's responses thereto are set out in the document: Response to Submissions from Consultation on Internal Models Based Approach (PDF 33KB)
Pillar 2
The Reserve Bank has finalised its approach to implementing Pillar 2 of Basel II in New Zealand. A summary of the approach, and feedback on the comments received during the consultation, are set out in Pillar 2 approach and feedback on consultation (PDF 41KB). See also Guidelines on a bank’s Internal Capital Adequacy Assessment Process (“ICAAP”) BS12 (PDF 49KB). The banks affected will be subject to the requirements of Pillar 2 once new conditions of registration implementing the necessary changes have been finalised.
Pillar 3
Pillar 3 of Basel II is designed to reinforce market discipline on banks’ capital adequacy by disclosure of relevant details of banks’ capital calculations. The Reserve Bank has issued proposed revisions to its disclosure requirements to implement Pillar 3. These proposals also include a number of other changes unrelated to Basel II. See further detail in proposed changes to disclosure requirements arising from Basel II implementation and IFRS.
The period for comments closed on 26 November 2007. The Reserve Bank has considered submissions received and new Registered Bank Disclosure Statement Orders in Council are expected to be gazetted by the end of February 2008.
Other implementation-related information
Securitisation and market risk (May 2007)
The implementation of capital adequacy rules for securitisation and market risk under Basel II.
RBNZ Basel II implementation timelines and operational risk (August 2005)
This details the implementation of the new Basel capital framework (Basel II) in New Zealand and the high level requirements of the internal models approach to operational risk.
News Release on implementation of Basel II capital rules in New Zealand (March 2005)
The Reserve Bank of New Zealand will allow both the "Internal Ratings Based" and "Advanced Measurement" Approaches in the implementation of the Basel II capital framework in New Zealand
The high-level principles for the cross-border implementation of Basel II in Australia and New Zealand are set out in:
* a letter to all banks about the Reserve Bank's decision to allow both the "Internal Ratings Based" and "Advanced Measurement" Approaches in the implementation of the Basel II capital framework in New Zealand; and
* the Terms of Engagement between the Reserve Bank of New Zealand and the Australian Prudential Regulation Authority in relation to the implementation of Basel II.
http://www.rbnz.govt.nz/finstab/bank...n/2265555.html
Basel II is a new international framework for determining how much capital banks should be required to hold, taking account of the risks that they take. As with the original Basel capital framework, Basel II was developed by the Basel Committee on Banking Supervision.
Latest developments
In February 2008, the Reserve Bank finalised the Capital Adequacy Framework (Internal Models Based Approach) BS2B (PDF 574KB) document that sets out the internal models based approach to the Basel II capital adequacy framework. A summary of the main points made in submissions on the draft version of BS2B and the Bank's responses thereto are set out in the document: Response to Submissions from Consultation on Internal Models Based Approach (PDF 33KB)
The Framework
The Basel II framework is set out in Basel II: International Convergence of Capital Measurement and Capital Standards: A Revised Framework on the website of the Bank for International Settlements.
Basel II is made up of three Pillars. Pillar 1 involves the calculation of minimum capital requirements to cover credit risk, market risk and operational risk. Pillar 2 covers capital for other risks and overall capital adequacy, and Pillar 3 covers disclosure.
For an introduction to Basel II and the Reserve Bank’s approach to its implementation in New Zealand, read A new capital framework (PDF 101KB) by Andrew Yeh, James Twaddle and Mike Frith (published in the Reserve Bank Bulletin, September 2005).
Implementation in New Zealand
The Reserve Bank is basing its bank capital adequacy requirements on Basel II, adapted where relevant to take account of the unique features of the New Zealand financial system.
Basel II will be implemented in New Zealand from the first quarter of 2008. Banks can elect to use the standardised approach or the internal models approach to calculate their capital requirements under Basel II.
Standardised approach
Pillar 1 standardised approach: Banks using the standardised approach under Pillar 1 will be subject to conditions of registration that will require capital adequacy to be calculated using the framework set out in the document Capital Adequacy Framework (Standardised Approach) BS2A - November 2007 (PDF 324KB).
A summary of the main points made in submissions on the draft version of BS2A and the Bank's responses thereto are set out in the document: Response to Submissions from Consultation on Standardised Approach (PDF 26KB)
Internal models based approach
In March 2006, the Reserve Bank published its application requirements for banks seeking accreditation to implement from January 2008 the internal models based approach – i.e internal ratings-based approaches to credit risk, and advanced measurement approach to operational risk. See
Basel II: Application requirements for banks seeking accreditation to use the internal-models approaches – March 2006 (PDF 142KB)
Reserve Bank also released an exposure draft Basel II: IRB national discretions – March 2006 (PDF 79KB), outlining the Reserve Bank's preliminary thinking on how to treat the national discretions available under the Basel II internal ratings-based approach to credit risk.
On 10 December 2007 the Reserve Bank announced that four banks had been accredited to adopt the internal models based approach under the Basel II banking supervisory regime.
The banks that were accredited to use internal models for credit and operational risk from the first quarter of 2008 are ANZ National Bank Limited, ASB Bank Limited, and Westpac New Zealand Limited. In addition, the Bank of New Zealand was accredited to use internal models for operational risk from the first quarter of 2008. The Bank of New Zealand is expected to apply for accreditation of its credit risk models during 2008.
In order for these four banks to retain their accreditation status they must comply with a number of on-going accreditation requirements. Some of these requirements are of a transitional nature, recognising that there is some way to go to fully embed the Basel II regime. In particular, there will be a transitional requirement to maintain capital at a level no less than 90 percent of the previous Basel I capital requirement. Other requirements relate to specific risk parameters to be used in some risk models, and improvements to be made to the banks’ risk models over time.
Banks using the internal models based approach for determining regulatory capital requirements will be required to calculate their regulatory capital requirements using the framework set out in the document the Capital Adequacy Framework (Internal Models Based Approach) BS2B (PDF 574KB). The Reserve Bank finalised this document in February 2008 taking into account submissions received on the draft document. A summary of the main points made in submissions on the draft version of BS2B and the Bank's responses thereto are set out in the document: Response to Submissions from Consultation on Internal Models Based Approach (PDF 33KB)
Pillar 2
The Reserve Bank has finalised its approach to implementing Pillar 2 of Basel II in New Zealand. A summary of the approach, and feedback on the comments received during the consultation, are set out in Pillar 2 approach and feedback on consultation (PDF 41KB). See also Guidelines on a bank’s Internal Capital Adequacy Assessment Process (“ICAAP”) BS12 (PDF 49KB). The banks affected will be subject to the requirements of Pillar 2 once new conditions of registration implementing the necessary changes have been finalised.
Pillar 3
Pillar 3 of Basel II is designed to reinforce market discipline on banks’ capital adequacy by disclosure of relevant details of banks’ capital calculations. The Reserve Bank has issued proposed revisions to its disclosure requirements to implement Pillar 3. These proposals also include a number of other changes unrelated to Basel II. See further detail in proposed changes to disclosure requirements arising from Basel II implementation and IFRS.
The period for comments closed on 26 November 2007. The Reserve Bank has considered submissions received and new Registered Bank Disclosure Statement Orders in Council are expected to be gazetted by the end of February 2008.
Other implementation-related information
Securitisation and market risk (May 2007)
The implementation of capital adequacy rules for securitisation and market risk under Basel II.
RBNZ Basel II implementation timelines and operational risk (August 2005)
This details the implementation of the new Basel capital framework (Basel II) in New Zealand and the high level requirements of the internal models approach to operational risk.
News Release on implementation of Basel II capital rules in New Zealand (March 2005)
The Reserve Bank of New Zealand will allow both the "Internal Ratings Based" and "Advanced Measurement" Approaches in the implementation of the Basel II capital framework in New Zealand
The high-level principles for the cross-border implementation of Basel II in Australia and New Zealand are set out in:
* a letter to all banks about the Reserve Bank's decision to allow both the "Internal Ratings Based" and "Advanced Measurement" Approaches in the implementation of the Basel II capital framework in New Zealand; and
* the Terms of Engagement between the Reserve Bank of New Zealand and the Australian Prudential Regulation Authority in relation to the implementation of Basel II.
http://www.rbnz.govt.nz/finstab/bank...n/2265555.html
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