Deposit Takers Act 2023

Regulation of deposit takers - Standards - Subject matter of standards

79: Capital, liquidity, security interests, and credit ratings

You could also call this:

"Rules for deposit takers: money, cash, guarantees, and debt management"

Illustration for Deposit Takers Act 2023

When you look at the rules for deposit takers, you see that a standard can cover several important areas. A standard can regulate things like capital, which is the money a deposit taker has to work with, and liquidity, which is the deposit taker's ability to access cash when needed. It can also deal with security interests, which are like guarantees over the deposit taker's property.

You might wonder what a security interest is, so let's break it down: a security interest is when someone lends money to a deposit taker and gets a guarantee over some of the deposit taker's property in case the loan is not paid back. A standard can set limits on what property can be used as a guarantee and who can be given a guarantee. It can also say what rules must be followed when creating a guarantee.

A standard can also cover credit ratings, which are like reports on how well a deposit taker can manage its debts. You can think of a credit rating like a score that shows how likely a deposit taker is to pay back its loans. A standard can say what type of credit rating a deposit taker needs to have and what the rating should be based on.

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This page was last updated on 6 August 2025

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS579789.

Topics:

Money and consumer rights > Banking and loansBusiness > Industry rules

78: Governance, incorporation structure, and ownership, or

"Rules for running and owning a company that takes people's money, like a bank"

80: Bail-in standards, or

"Rules for banks to follow when dealing with special financial products called 'bail-in instruments'"

Part 3Regulation of deposit takers
Standards: Subject matter of standards

79Capital, liquidity, security interests, and credit ratings

A standard may regulate, deal with, or otherwise relate to 1 or more of the following matters:
capital, including matters relating to capital ratios, minimum capital, assessing capital adequacy, capital recognition, capital repayment, defining categories of qualifying capital, and methods of calculating capital:
liquidity, including matters relating to managing liquidity risk, contingency funding, defining categories of qualifying liquidity, and methods of calculating liquidity:
security interests given over the property of the deposit taker, including 1 or more of the following:
1. limits on the proportion of the deposit taker’s property that may be subject to a security interest:
2. restrictions or prohibitions on the property to which a security interest may relate:
3. restrictions or prohibitions on who may be given a security interest over the deposit taker’s property:
4. any other requirements relating to the terms and conditions of agreements that create or provide for a security interest:
ratings of creditworthiness required to be held by a licensed deposit taker, including—
1. the type of rating (for example, whether it is a short-term or long-term rating); and
2. what the rating must relate to (for example, whether it indicates the creditworthiness of a deposit taker with respect to a specific financial obligation or applies to the deposit taker’s overall creditworthiness).