Bank of New Zealand boss Angie Mentis has warned that "capital will get scarcer" as it prepares itself for new capital requirements by the Reserve Bank (RBNZ).

Early next month, RBNZ is due to announce its final decision on proposals to increase the capital which banks have to hold.

Its proposals include a near doubling of the minimum common equity banks should hold from 8.5 per cent currently to 16 per cent for the big four banks and are designed to ensure there is less chance of a bank failing.

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