A strong liquidity profile is important for all companies. This is particularly true for banks, given the maturity transformation role that is inherent to much of their business. The maintenance of a sound and efficient financial system requires banks to hold a liquidity profile that is robust...

In this article, the evolution of the liquidity management regime over the past few years is detailed. This evolution is placed in the context of the prevailing financial market stresses. The robustness and adaptability of the system to a variety of shocks is discussed. Particular mention is...

In July 2006, the Reserve Bank commenced implementation of changes to its liquidity management regime. Under the existing regime, there had been increasing evidence of insufficient liquidity in the banking system at various times and some inefficiencies in the way in which it was provided. Under...

The Reserve Bank supervises registered banks with the objective of promoting the maintenance of a sound and efficient financial system and avoiding significant damage to the financial system from the failure of a bank. While the Reserve Bank designs its prudential supervision to reduce the risk...

The Reserve Bank supervises registered banks with the objective of promoting the maintenance of a sound and efficient financial system and avoiding significant damage to the financial system from the failure of a bank. In recent years, the Reserve Bank has been working on the implementation of...

The four largest banks in New Zealand have been accredited to operate as ‘internal models’ (IM) banks under the Basel II capital framework. Under this approach, banks are allowed to use their own models as a basis of determining their minimum capital requirements, subject to their models...

Loans to the rural sector represent a significant exposure for banks in New Zealand. In 2008, under the Basel II capital framework, the Reserve Bank accredited the four major banks in New Zealand to use their own models of relative riskiness in calculating capital requirements for different...