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Reserve Bank welcomes new responsibilities
3 September 2008
Reserve Bank welcomes new responsibilities
Today represents a significant step forward in helping improve the future resilience of New Zealand's non-bank financial sector Reserve Bank Governor Alan Bollard said today.
The Reserve Bank Amendment Bill (No 3) was passed today making the Reserve Bank the regulator of non-bank deposit takers. Dr Bollard said he is confident that the new legislation will provide a strong basis for confidence in the deposit-taking sector, which includes finance companies, building societies and credit unions.
The Bank's role will be to require information from trustees of deposit takers, to develop and enforce minimum prudential and governance requirements and to administer credit rating requirements.
"We are encouraging non-bank deposit takers to move towards adopting the new regulatory standards as soon as possible. Trustees will continue to be front-line supervisors of deposit takers, and we look forward to working proactively with trustees as they work towards a more enduring role in the sector," Dr Bollard said.
"Credit ratings from reputable rating agencies will play an important role in the new regulatory arrangements. Credit ratings assist depositors to compare the level of risk they are taking with the return they are getting when they invest in a deposit taker," commented Dr Bollard.
The Reserve Bank will engage with stakeholders, including deposit takers and trustees, in developing the regulations once the legislation has been enacted. The Bank will also work with the Securities Commission to revise and simplify public disclosure requirements for deposit-takers.
The Bank will be working to develop and introduce new regulations for the industry over the next two years. These regulations will introduce consistent standards for key risk areas such as financial strength (capital), access to cash (liquidity) and lending to associated parties. It is expected that these new rules will be introduced in 2010.
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