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WELLINGTON, July 22 (Reuters) - New Zealand's central bank on Tuesday said it would begin a review of the country's banking regulations this month to assess their effectiveness in the aftermath of the global financial crisis.
The review, which will be carried out over a year, will evaluate the regulatory framework for banks and non-bank deposit takers and look for ways to simplify rules around issues including capital adequacy, and the removal of redundant regulations.
"Our aim is to improve the efficiency, clarity and consistency of prudential regulation," RBNZ Deputy Governor Grant Spencer said in a speech to the New Zealand Bankers' Association.
"We must be sure that our prudential regulations are fit-for-purpose and that the benefits outweigh the constraints and costs."
Spencer said the review would "shape and thin the stock of regulation rather than being a severe pruning."
New Zealand's banks, most of which are owned by Australian banks, avoided serious credit shocks during the global financial crisis, but struggled when market liquidity dried up.
Banks operating in the country are compliant with key regulations associated with Basel reforms and the Financial Stability Board, while new regulations on the consumer finance and insurance sectors have been introduced in past years.
Spencer did not address monetary policy issues in his speech. The RBNZ is widely expected to raise official interest rates at a monetary policy review on Thursday before slowing the pace of further rate rises.
Reporting by Naomi Tajitsu; Editing by Shri Navaratnam