Cabinet paper

Cabinet Paper DEV-23-SUB-0169: Financial Arrangements for the Reserve Bank

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Cabinet Paper: DEV-23-SUB-0169: Financial Arrangements for the Reserve Bank#


1I am informing the Committee of my decisions relating to the financial arrangements of the Reserve Bank of New Zealand (the Bank). I am seeking Cabinet’s agreement to provide the Bank with a capital contribution of $1.3 billion.

2Subject to my consideration of the public interest test under section 65ZD of the Public Finance Act 1989, I intend to provide the Bank with an indemnity to cover risks resulting from policy interventions that the Bank may need to undertake to support financial stability, such as interventions in the New Zealand Government Bond market. I would expect these interventions would be aimed primarily to support New Zealand’s financial stability. I intend to terminate the existing indemnity to support the Large Scale Asset Purchase (LSAP) programme. This would not terminate the liability for LSAP bonds purchased to date but would terminate this indemnity for future bond purchases.

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