By Gareth Vaughan
An Auckland meeting of global banking regulators has highlighted a difference of opinion between host the Reserve Bank of New Zealand (RBNZ) and the Basel Committee on Banking Supervision, which is the key global standard-setter for bank prudential regulation.
Stefan Ingves, Chairman of the Basel Committee and Governor of Swedish central bank Sveriges Riksbank, used his speech to defend the Basel III leverage ratio, which measures capital held by a bank against its total assets. Ingves said the leverage ratio was a key component of the post global financial crisis Basel III bank capital adequacy reforms.
However, in his address RBNZ Governor Graeme Wheeler reiterated the long standing RBNZ view that the leverage ratio is unnecessary in New Zealand. The RBNZ is also out of step with the Australian Prudential Regulation Authority, which has included the leverage ratio in its version of Basel III.
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