Threats by Aussie bank bosses to sell down their investments in New Zealand if the Reserve Bank follows through on changes to capital rules have been welcomed by local market players.

In the submission on the proposed Reserve Bank capital reviews both the ANZ Group chief executive and BNZ parent company, National Australia Bank, warned that a lower return on equity would force them to review their investment in New Zealand.

If NAB can't maintain returns from BNZ at similar levels to the wider group's earnings, the bank would "need to divert capital away from our New Zealand business and

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