Deposit Takers Act 2023

Regulation of deposit takers - Standards - Subject matter of standards

85: Risk management, business continuity planning, and problem assets

You could also call this:

"Managing risks and planning for problems that might affect people's money"

Illustration for Deposit Takers Act 2023

A standard can tell a deposit taker how to manage risks. You need to know what risks a deposit taker might face, such as operational risk, credit risk, and cybersecurity risk. The standard can also say how a deposit taker should plan for business continuity and deal with problem assets.

A deposit taker has to think about many kinds of risks, including liquidity risk, interest rate risk, and market risk. They also have to consider concentration risk and model risk, which is the risk that a model they use might not work properly.

The standard can give rules about how to identify, measure, and control these risks, and how to make plans for if something goes wrong, like a cybersecurity attack. It can also tell a deposit taker how to keep track of problem assets, like debts that might not be paid back, and how to set aside money for these problems.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS579793.


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"Lending rules can also apply to people who lend money but don't take deposits."


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86: Depositor compensation, or

"Help for people who have money in the bank if it gets into trouble"

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

85Risk management, business continuity planning, and problem assets

  1. A standard may regulate, deal with, or otherwise relate to 1 or more of the following matters:

  2. the management by a deposit taker of 1 or more of the following risks (including policies and processes to identify, measure, evaluate, monitor, report on, control, and mitigate those risks):
    1. operational risk:
      1. credit risk:
        1. liquidity risk:
          1. interest rate risk:
            1. concentration risk:
              1. market risk:
                1. model risk (for example, the risk that a model for calculating capital will not perform adequately):
                  1. cybersecurity risk:
                  2. policies and processes for—
                    1. business continuity planning:
                      1. the early identification and management of problem assets (including the classification and valuation of those assets); and
                        1. maintaining adequate provisions and reserves in connection with problem assets.