In New Zealand, the question of whether our requirements for the overall minimum level and quality of bank capital should be higher or lower is an ongoing workstream for us, quite aside from Basel II and considerations of risk sensitivity. Regulatory capital requirements for banks incorporated in New Zealand will be calculated under Basel II from January 2008.
In New Zealand, banks will not be required to use internal models approaches, and those that do not will use "standardised" approaches, which link minimum capital requirements to external measures of risk. Banks applying to be "accredited" to use internal models to calculate minimum capital requirements will need to submit their applications to the Reserve Bank by July this year.