The Reserve Bank of New Zealand will lower some capital requirements for the banking industry, but they will still be higher than international standards.

The Reserve Bank of New Zealand announced on Wednesday that it will reduce some capital requirements for the country's banking sector after reviewing the rules implemented in 2019, but the overall requirements will still be higher than international levels. The ratio of Tier 1 capital that the four major Australian-owned banks in the country must hold will be lowered from 16% to 12%, but the requirement for Tier 2 capital will be increased from 2% to 3%, and they will also need to hold 6% of internal loss-absorbing capacity. The total capital requirement for smaller banks will be lowered from 16% to 14%, but it was noted that these changes are still relatively conservative compared to international standards.