Phase 2 of the Reserve Bank of New Zealand Act Review

The ASF’s submission to New Zealand Crown Treasury on the ‘regulatory perimeter’ proposals in Phase 2 of the Reserve Bank Act Review was successful, with the result that there should be no general “call-in” power for the regulator to exercise prudential supervision of wholesale funded non-bank lenders (NBLIs) in the future.  The key justifications can be summarised as follows:

  • There is no current regulatory justification for including NBLIs in the prudential regime, because (1) they do not create systemic risk, (2) the current system conforms to international norms in setting the perimeter according to retail deposit-taking; and (3) that perimeter is justified by underlying regulatory principles.
  • Creating a discretionary designation or call-in power would not be appropriate, for the reasons given above, and because (1) prudential regimes are unlikely to be fit for purpose since they are predicated on and designed for market failures applying to deposit-taking models, and (2) (relatedly) no consensus has emerged internationally on how to efficiently regulate wholesale-funded NBLIs.
  • Ultimately, in either case, the proposals would come at the expense of diversity, competition and efficiency, without offering any clear stability benefit.

Instead the said “call-in” power is to be solely an anti-avoidance measure to regulate firms who, in substance, are taking retail deposits.  The intention to have a regulatory definition of the wholesale funded non-deposit taking lending institutions will create certainty for the market.

Read more about the Reserve Bank Act Review

What's On

Upcoming courses, seminars and networking opportunities for your professional development



Women in Securitisation networking event




Securitisation Fundamentals course




Securitisation Professionals course




Securitisation Fundamentals course




Securitisation Trust Management


Australian Securitisation Journal

The Australian Securitisation Journal (ASJ) is the official journal of the Australian Securitisation Forum. The ASJ is published by KangaNews on a semi-annual basis.

Read the official journal of the ASF

Market snapshot

View a snapshot of the Australian structured credit market, courtesy of Macquarie Debt Markets Research. Key data is refreshed on a monthly basis.

View the latest market activity