Key agencies and their system roles
The Treasury is responsible for policy advice and matters in relation to the Reserve Bank of New Zealand Act 2021. This includes advising the Minister of Finance on the development of the monetary and financial policy remits, providing first opinion advice on the legislative aspects of the monetary policy framework, and second opinion advice on financial policy issues related to the sectoral legislation described in the above section.
The Treasury is also responsible for advising on fiscal risks to the Crown, which can be created by the RBNZ's interventions in the foreign exchange market and the level of foreign exchange reserves available, the crisis management framework, and the future deposit insurance scheme. The Treasury has a joint role (with the RBNZ) in reviewing the foreign reserves management and coordination framework every five years.
The Minister of Finance has appointed the Treasury as the monitor of the RBNZ under s80 of the Reserve Bank of New Zealand Act 2021. The role of the monitor is primarily to assist the Minister to carry out the Minister’s role of overseeing and managing the Crown’s interests in, and relationship with, the RBNZ and to exercise any statutory responsibilities given to the Minister.
Reserve Bank of New Zealand
The Reserve Bank of New Zealand (RBNZ) is responsible for policy advice in relation to prudential regulation and supervision of banks, non-bank deposit takers, insurers, and financial market infrastructures. It is also responsible for the formulation and implementation of monetary policy.
The RBNZ must be consulted on the financial policy remit before the Minister of Finance issues it. The RBNZ is also required to provide remit advice on the monetary policy remit, which the Minister must have regard to.
Collaboration and information-sharing between system agencies
The Council of Financial Regulators (CoFR) is a forum for sharing information, and considering and addressing financial markets' regulatory issues more broadly. CoFR considers risks or gaps that arise or are being monitored. It comprises the Treasury, Ministry of Business, Innovation and Employment (MBIE), RBNZ, Financial Markets Authority (FMA), and Commerce Commission, which are the key government agencies responsible for the financial markets regulatory systems. CoFR is chaired by the RBNZ and FMA.
The Treasury also co-chairs the Trans-Tasman Council on Banking Supervision (TTBC), which aims to promote the coordination of trans-Tasman bank regulation and supervision. The TTBC is jointly chaired by the secretaries of the New Zealand Treasury and the Australian Treasury. Its membership includes the RBNZ, the FMA, the Reserve Bank of Australia, the Australian Prudential Regulatory Authority, and the Australian Securities and Investments Commission.
Regulated parties and main stakeholders
Key stakeholders include the RBNZ, other CoFR agencies, and those parties regulated under the prudential legislation administered by the RBNZ, which include banks, non-bank deposit takers, insurers and designated payment systems.
Processes for engagement with regulated parties and stakeholders
Our policy processes aim to follow good regulatory practice, including by:
- engaging with the RBNZ and interested stakeholders
- consulting publicly on relevant policy proposals
- releasing exposure drafts of new legislation or regulation.