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New Zealand central bank looking to update its banking rules

Graeme Wheeler, governor of the Reserve Bank of New Zealand (RBNZ), speaks during a news conference at the central bank's headquarters in Wellington, New Zealand.

[WELLINGTON] New Zealand's central bank wants to update its supervision of the country's banking and finance sector while lowering costs, a senior official said on Tuesday.

The Reserve Bank of New Zealand (RBNZ) has started a review of prudential requirements for registered banks and non-bank licenced deposit takers such as credit unions and finance companies.

The RBNZ said it was looking at measures to improve the efficiency of its prudential regime, as well as measuring capital requirements for non-banks. "Overall, we expect that the changes that are being considered as part of the stocktake will result in significant cost savings for banks, and improvements in the efficiency of the regulatory regime," RBNZ head of prudential supervision Toby Fiennes said in a statement.

The RBNZ is seeking submissions on the proposals through mid-September. New Zealand's banking system is dominated by four Australian owned companies - ANZ, Commonwealth Bank, National Australia Bank, and Westpac - though the local businesses are required to be operationally independent of the parents, and to comply with RBNZ-set capital ratios.

The country's non-bank deposit-taking sector was heavily hit by the global financial crisis and local recession. More than 60 participants, who held more than NZ$8.5 billion (S$7.7 billion), either failed or were closed down.