Public Consultation - third round (Reserve Bank Act Review) - figure description

Key

• ✓ Key decisions taken by Cabinet
• Key remaining issues to be covered in the current consultation

• ✓‘Financial stability’ as the high-level objective for the Reserve Bank’s financial policy function

• ✓ There will be an ‘on-site inspection’ power
• ✓ Wider range of formal enforcement powers

• ✓ There will be a single regime for all deposit takers

• ✓ Reserve Bank will be resolution authority, with clear objectives and functions
• ✓ Widen resolution powers (eg statutory bail-in powers)
• ✓ ‘No creditor worse off’ provisions

• What should the purposes of the Deposit Takers Act be?
• What decision-making principles should apply under the Deposit Takers Act?

• Scope of on-site powers
• Confirmation of additional enforcement tools
• How will breaches of requirements be reported?

• How should the regulatory perimeter be defined?
• How should finance companies be treated?
• How should the regime deal with smaller entities?
• How should the flexibility of the perimeter be maintained?

• Thresholds for using early intervention and resolution powers
• Liabilities to be subject to bail-in
  Statutory management advisory committee
• Resolving credit unions and building societies
• Whether deposit takers should remain subject to CIMA statutory management

* Other details of crisis management are being
developed in parallel to the
public engagement process

• ✓ Formal deposit insurance with a $50,000 limit
• ✓ Funded by a levy on deposit takers, with a Government backstop

• ✓ Standards as the main tool for imposing prudential requirements

• ✓ Director accountability for deposit takers should be enhanced
• ✓ Accountability requirements should be extended to senior executives of deposit takers and insurers*

• What products should be insured?
• How should insurance be funded?
• Who should administer the insurance scheme?
• What role should the insurer have?
• Should depositors have preference in resolution?

• What kinds of standards could be set?
• How should macro-prudential standards be dealt with?
• What process should the Reserve Bank go through in setting standards?
• How should the licensing process for deposit takers work?

• What types of penalty should apply to breaches of requirements?
• What should the enhanced duties for directors look like?

* This will be progressed outside the Phase 2 Review