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Reserve Bank of New Zealand Bill

Institutional and accountability reform

Institutional and accountability reform will be enacted by the Reserve Bank of New Zealand Bill, which was introduced on 28 July 2020. The Finance and Expenditure Select Committee reported back on the Bill on 8 June 2021.

The Reserve Bank of New Zealand Bill modernises the institutional arrangements of the Bank by replacing the single-decision maker model with a governance board and strengthening reporting and accountability requirements. The new governance board will be tasked with all the responsibilities of the Reserve Bank (other than those given to the Monetary Policy Committee).

The main changes proposed include:

  • Establishing a new governance board responsible for all decision making (except decisions made by the Monetary Policy Committee);
  • Reframing the overarching financial stability objective to “protecting and promoting the stability of New Zealand’s financial system”;
  • Requiring the Minister to issue a Financial Policy Remit that the Board must have regard to;
  • Aligning more closely with wider state sector practice in terms of reporting and monitoring requirements, with the Treasury acting as the external monitor;
  • Legislatively mandating the role of the Council of Financial Regulators to better coordinate the efforts of agencies responsible for regulating our financial system.

A copy of the current Bill is available at the Parliamentary Counsel Office’s New Zealand Legislation website.

Progress on the Bill can be followed at the New Zealand Parliament website Bills and Laws page.

It is anticipated that, subject to progress through Parliament, this bill will be enacted in the second half of 2021. The reforms are expected to come into force mid-2022.

In preparing for changes, the Treasury is currently recruiting directors for a transition board, which will act as the precursor to the new governance board. The transition board will focus on ensuring key policies, strategies and decision frameworks are ready for the statutory governance board’s approval by the end of the transition period.

Key documents featuring substantive policy decisions

DateCreatorTitle
14-06-2021 The Treasury
28-07-2020 New Zealand Treasury
14-07-2020 Reserve Bank of New Zealand; The Treasury
22-06-2020 Reserve Bank of New Zealand; The Treasury
18-03-2020 Office of the Minister of Finance
18-03-2020 Cabinet Office
21-02-2020 Reserve Bank of New Zealand; The Treasury
18-02-2020 The Treasury
14-02-2020 Reserve Bank of New Zealand; The Treasury
11-12-2019 Cabinet Office
05-12-2019 Office of the Minister of Finance
31-10-2019 Reserve Bank Act Review Team; Reserve Bank of New Zealand; The Treasury
18-10-2019 Reserve Bank Act Review Team; Reserve Bank of New Zealand; The Treasury
04-10-2019 Reserve Bank Act Review Team; Reserve Bank of New Zealand; The Treasury
24-06-2019 Reserve Bank of New Zealand; The Treasury
24-06-2019 Reserve Bank of New Zealand; The Treasury
01-11-2018 Reserve Bank of New Zealand; The Treasury

Proactively released information, speeches, media releases, and announcements are all available at the Treasury Reserve Bank Act Review proactive releases, speeches and announcements page.

Last updated: 
Thursday, 15 July 2021