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Reviewing the Reserve Bank Act

Page updated 16 Feb 2018

In November 2017 the Government announced it will undertake a review of the Reserve Bank of New Zealand Act 1989 to create a modern monetary and financial policy framework.

The Review will ensure the Reserve Bank’s monetary and financial policy framework still provides the most efficient and effective model for New Zealand.

Phase 1

The Review will:

  • recommend changes to the Act to provide for requiring monetary policy decision-makers to give due consideration to maximising employment alongside the price stability framework
  • recommend changes to the Act to provide for a decision-making model for monetary policy decisions, in particular the introduction of a committee approach, including the participation of external experts, and
  • consider whether changes are required to the role of the Reserve Bank Board as a consequence of the changes to the decision making model.

Phase 2

In line with the Government’s coalition agreement to review and reform the Reserve Bank Act, the Reserve Bank and the Treasury will jointly produce a list of areas where further investigations of the Reserve Bank’s activities are desirable. This list will be produced in consultation with the Independent Expert Advisory Panel.

This list, and the next steps for the Review, will be communicated early in 2018. This phase of the Review will incorporate the review of the macro-prudential framework that was already scheduled for 2018.

Independent Expert Advisory Panel

In December 2017, an Independent Expert Advisory Panel was appointed by the Minister of Finance to provide input and support to the Review based on the Terms of Engagement (144 KB). The panel members are:

  • Suzanne Snively ONZM (Chair): a former Director of the Reserve Bank of New Zealand, Suzanne is an independent economic strategist, professional director and risk management advisor. She is the Chair of Transparency International New Zealand and a director on boards including the Health Research Council, the Army Leadership Board and Te Pou Matakana.
  • Dr Malcolm Edey: Malcolm is a consulting economist and academic, lecturing in economic policy, banking and finance at the University of Sydney. Previous roles include Assistant Governor (Financial System) and Assistant Governor (Economic) of the Reserve Bank of Australia, and Chair of the OECD Committee on Financial Markets.
  • Dr Girol Karacaoglu: Girol is the Head of the School of Government at Victoria University of Wellington with a focus on research in public policy. He was previously Chief Economist and Deputy Secretary, Macroeconomics, International and Economic Research at the Treasury, and was Chief Executive of The Co-operative Bank for nine years.

Next steps

Independent Expert Advisory Panel

The Independent Expert Advisory Panel will be meeting with officials over the period between December 2017 and March 2018 on issues related to phase 1 and development of the list of issues for phase 2.

The first meeting was held on Wednesday 20 December 2017.  The agenda for that meeting, along with the substantive papers discussed at the meeting, can be found here.

Proactive release of background papers

The Treasury has made a number of background papers, from a variety of authors, available to the Independent Expert Advisory Panel.  These papers are not part of the Review but provide some useful information to inform the Panel’s discussions. 

The legislative process

Advice on phase 1 of the Review will be provided to the Government by March 2018 ahead of the signing of a new Policy Targets Agreement by the Minister of Finance and the Governor of the Reserve Bank. A Bill to progress the policy elements of phase 1 of the Review will be introduced as soon as possible in 2018.

Phase 2

The Reserve Bank and the Treasury are working on developing a list of issues for consideration as part of phase 2 of the Review. The Independent Expert Advisory Panel will also provide input into the scope of phase 2.

Terms of reference

The terms of reference for the Review can be found below.

Feedback welcomed

The Treasury welcomes feedback on phase 1 or the scoping of phase 2. The dates signaled below reflect how feedback will be incorporated into different stages in the process. There will be further opportunities to input later in the process on both phases. 

For Phase 1, please provide any submission to us by 19 February 2018 if you would like your input to be considered before initial advice is provided to the Minister. There will be further opportunities to have your say, including during the select committee process for the Reserve Bank Amendment Bill. The select committee process will likely be in the second half of this year.

For Phase 2, please provide any submissions to us by 9 March 2018 on the list of issues that should be considered as part of Phase 2.  It is likely that this list will be considered in late March or early April. Once the list of issues for Phase 2 has been finalised, we will work closely with industry participants as the review progresses to policy proposals.

If you would like to make a submission, please email:

All information in submissions will be made public unless you indicate you would like all or part of your submission to remain confidential. If you would like part of your submission to remain confidential, then we would appreciate if you could provide us with a second version of your submission that indicates what parts you want to withhold.

If an OIA request for withheld information is made, the Treasury will make its own assessment of what must be released taking into account your views (including whether disclosure is likely to prejudice the future supply of similar information) and matters concerning the public interest.

The Treasury may also publish an anonymised summary of the submissions received on this consultation.

Documents relating to the review

Documents are available in Adobe PDF format only. Using PDF Files
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