Regulator consults on new mortgage bond standard

by Krizzel Canlas16 Nov 2018

The Reserve Bank of New Zealand (RBNZ) is seeking feedback on the proposed new mortgage bond standard.

This follows an initial consultation in November 2017 and ongoing discussion with issuers and investors over the past year.

The new mortgage bond standard aims to:

  • reduce contingency risks for the Reserve Bank as a lender of last resort and ensure financial intermediaries supply sufficient high quality and liquid assets; and
  • provide issuers and investors with an additional funding and investment instrument.

“It will ultimately support the development of deeper capital markets,” Deputy governor head of financial stability Geoff Bascand said.

The consultation paper summarises the changes proposed in response to the key issues raised by industry and sets out the revised mortgage bond standard.

The regulator expects to issue final decisions in March 2019, and commence implementation from June 2019. It proposes a five-year transition to full implementation.

Consultation closes February 22, 2019.

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