Reserve Bank of New Zealand (RBNZ) is planning to ramp up supervision over financial institutions, reported Reuters.
The move comes against the backdrop of increasing international risks as well as to support its plans to increase resilience of the banking system.
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Early next month, the central bank is also scheduled to announce its decision on raising bank capital buffers.
RBNZ governor Adrian Orr said: “Strong bank capital buffers are key to enabling banks to absorb losses and continue operating when faced with unexpected developments.”
The central bank of the country has stepped up efforts to increase bank oversight following a number of scandals by major Australian banks, most of which have operating units in New Zealand.
Orr told the news agency that the central bank has communicated with all lenders to ensure that they are meeting all regulatory requirements.
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By GlobalDataIt has also initiated reviews to address deficiencies in governance and risk management among local institutions.
Recently, RBNZ increase supervision of the Bank of New Zealand (BNZ), the local subsidiary of NAB. The decision was taken following the detection of failures in BNZ’s capital calculation processes.
RBNZ deputy governor Geoff Bascand said: “We are engaging with industry to ensure that they strengthen their own assurance processes and controls.
“We have also reviewed our own supervisory strategy and will be taking a more intensive approach, which will involve greater scrutiny of institutions’ compliance.”
Earlier this year, the Government of New Zealand has announced plans to introduce a bank deposit protection regime. The scheme will guarantee deposits between NZ$30,000 and NZ$50,000.
