WELLINGTON, April 24 (Reuters) - The Reserve Bank of New
Zealand said on Monday that it would implement a 250% risk weigh
for bank investments in the Business Growth Fund (BGF) down from
the current 400%.
Announced last year, the Business Growth Fund helps small
and medium businesses access finance, and the fund is part of a
government plan to grow businesses that would otherwise not be
able to access funding.
The central bank said that a 400% risk weight investment
applied for investing in an entity but because of the
diversification benefits of the BGF the risks are likely to be
lower than investing in a single entity.
Risk weights are used to covert a bank's exposure into a
risk-weighted assets and banks are required to hold capital
against these liabilities.
(Reporting by Lucy Craymer; Editing by Lisa Shumaker)
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