Review could tighten loan market
The Reserve Bank is currently taking submissions on its issues paper, reviewing the requirements placed on banks in this country.
It said, in a changing international regulatory environment, where other countries were placing higher requirements on their banks, it was less clear whether New Zealand’s position on bank capital was being maintained relative to Australia and other countries.
Australia has recently tightened its rules. Some Australian parents have required money to be sent across the Tasman from their New Zealand subsidiaries as a result.
Forsyth Barr said if more prudent settings were imposed here, which looked likely, it could tighten credit availability. The banks' lending clampdown was already holding back construction intentions, it said.
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