Grant Spencer: Review of bank capital requirements Speech by Mr Grant Spencer, Deputy Governor of the Reserve Bank of New Zealand, to the New Zealand Bankers’ Association, Auckland, 7 March 2017. * * *  Introduction Since the traumatic experience of the Global Financial Crisis (GFC) in 2007–2009, banks and regulators have been revising their assessment of appropriate levels of capital.
Bank capital is an important cushion for the financial system. It is the form of funding that stands first in line to absorb any losses that banks may incur. Having sufficient capital promotes financial stability by reducing the likelihood of bank insolvency and moderating the effect of credit cycles.