The New Year promises interesting times for the Reserve Bank and those under its prudential supervision. Banks, non bank deposit takers (NBDTs) and collective investment schemes will continue to weigh up the option of participating in the Crown Deposit Guarantee, and we can expect to see some regulations for the supervision of NBDTs under the Reserve Bank of New Zealand Amendment Act 2008 (NBDT Act).
Substantive obligations for NBDTs will be rolled out in the next eighteen months to two years, with NBDTs being required to have risk management programmes in place by 1 September 2009 and mandatory credit ratings by 2010. The Reserve Bank has indicated that it is working on approving agencies which would enable NBDTs to commence their ratings reviews in order to be compliant.
We understand that a discussion paper will be released before Christmas relating to minimum capital levels, minimum liquidity levels and capital ratios. We anticipate that there will be a tight deadline for feedback from the industry.
It remains to be seen how these pending regulations will be viewed by the new Government, given indications that their priorities (at least initially) lie in other areas. The Reserve Bank has indicated that it will continue to consult with affected parties. Trustees and other affected parties should expect to be kept up to date and to be in consultation with the Reserve Bank throughout the year.
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