The Reserve Bank of New Zealand Bill was introduced to Parliament today, a further step in the Review of the Reserve Bank Act 1989 announced by the Minister of Finance in November 2017.
Key changes in the new Bill will strengthen governance and accountability and provide the new Board with a financial policy remit. The Treasury will take on the monitoring role for the Reserve Bank, strengthening oversight of the Bank’s performance.
The Bill also carries over the changes made to the monetary policy framework in 2018 as part of Phase 1 of the Review of the Reserve Bank, including providing the Bank with a new employment objective and the creation of the Monetary Policy Committee.
Other parts of the Review’s phase 2 reforms including the Government’s in-principle decisions in relation to the regulation of banks and other deposit takers, and the introduction of a deposit insurance scheme, will be progressed through a separate Deposit Takers Act scheduled for introduction in 2021. Consultation on this work has been extended to remain open until October 23 2020, and information is available here: Public Consultation - third round (Reserve Bank Act Review)
The Minister of Finance’s media release on the Reserve Bank of New Zealand Bill is available here: Reserve Bank reform to improve governance and accountability (beehive.govt.nz)
An overview of the Review of the Reserve Bank Act is available here: The Reserve Bank Act Review