The Reserve Bank of New Zealand (RBNZ) has revoked the local license of Australia and New Zealand Banking Group to calculate its own operational risk capital. The central bank said the action in on account of ‘persistent’ control failures, adding to the bank’s minimum capital requirement in the country. The censure comes at a time when RBNZ is undertaking broader measures to increase capital requirements and reduce risk to the financial system in the event of any major shock. ANZ’s New Zealand unit would now be required to use the central bank’s standardized approach for calculating operational risk, raising its minimum capital requirement to NZ$760 million ($496.4 million). ANZ is the biggest of the 4 Australian-owned banks that dominate the New Zealand market. It is allowed by RBNZ to calculate its own regulatory capital requirements, but an internal review in April revealed that it was not using the operational risk model the central bank had approved.
