WELLINGTON, March 7 The Reserve Bank of New
Zealand (RBNZ) said on Tuesday that it will balance the
integrity of the country's financial system with banking
efficiency during a review of bank capital requirements in the
"Higher levels of capital would improve the soundness of the
financial system by reducing the likelihood of bank failures,"
RBNZ Deputy Governor Grant Spencer said in a speech to the New
Zealand Bankers Association in Auckland, which was also
published on the RBNZ website.
"However, the capital regime could reduce the efficiency of
financial intermediation if ratios are pushed too high or
standards are made overly complex," he said.
The review will cover the definition of capital, the
measurement of risks that the banks face and the minimum capital
requirements and buffers, Spencer said.
More details will be provided in an issues paper in April,
Spencer said, adding that the RBNZ aims to complete its review
by the first quarter of 2018.
(Reporting by Tom Westbrook, editing by G Crosse)