The Reserve Bank of New Zealand (RBNZ) has initiated a consultation process to review and potentially reduce capital requirements for deposit takers. The central bank is considering two options for overall capital ratios, both of which would materially lower the requirements compared to those established in 2019. Among the proposals is a reduction of the minimum capital requirement to NZ$5 million. The RBNZ indicated that these proposals reflect a higher risk appetite than in 2019 and aim to align with the views of various stakeholders. New Zealand Prime Minister Christopher Luxon has welcomed the review, and industry figures such as Willis and ANZ have recognized the potential benefits, including lower borrowing costs and reduced risk weightings that could decrease costs for sectors like farming.