Following on from the completion of a consultation on covered bond programmes by New Zealand banks last year, the Reserve Bank has announced that a regulatory limit will be applied to the issuance of covered bonds. It will set an initial limit of 10 percent of the total assets of an issuing bank, with this limit calculated on the value of assets encumbered for the benefit of covered bond holders. Further announcements on the form of the legislative support and the relevant disclosure requirements will follow later this year.

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