NEWS RELEASE
Date 10 December 2007 Time
Embargoed to 12 noon
RBNZ accredits four NZ banks under Basel II Accord
The Reserve Bank of New Zealand today announced that four banks have been accredited to adopt the internal models
approach under the Basel II banking supervisory regime.
Reserve Bank Deputy Governor Grant Spencer said the banks that have been 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 has been 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.
"A key feature of the Basel II regime is that it increases the sensitivity of capital requirements to key bank risks,
particularly credit risk," Mr Spencer said.
Mr Spencer said that the banks that have been accredited are now able to calculate regulatory capital with their
respective internal models. The other three locally incorporated registered banks in New Zealand did not apply for
accreditation, and will operate on a 'standardised' Basel II approach for calculating regulatory capital.
Mr Spencer added that in order for the four internal models banks to retain their accreditation status they must comply
with a number of accreditation requirements.
"Some of these requirements are of a transitional nature, recognising that we have 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."
ENDS