Submissions received on new mortgage bond standard, update on repo-eligibility conditions
12 August 2019
The Reserve Bank has today published a summary of submissions on its consultation proposing a new mortgage bond standard
aimed at supporting confidence and liquidity in New Zealand’s financial markets.
Submissions on the new proposed mortgage bond standard are broadly supportive of the introduction of a high grade
residential mortgage backed securities framework for New Zealand – known as Residential Mortgage Obligations (RMO).
The new standard aims to reduce contingency risks for the Reserve Bank as a lender of last resort, ensuring financial
intermediaries supply sufficient high quality and liquid assets. The standard also aims to provide issuers and investors
with an additional funding and investment instrument, supporting the development of deeper markets.
Assistant Governor and General Manager of Economics, Financial Markets and Banking Christian Hawkesby said he was
pleased with the range and depth of feedback received during the consultation process.
“The consultation process has been successful in delivering improvements to the initial concept for a new mortgage bond
standard to support financial intermediation, liquidity management and funding in New Zealand’s markets.”
The feedback from issuers, investors and other market participants has been constructive and it will help inform the
Reserve Bank’s final policy decision which is expected to be published by the end of 2019.