Consultation details announced for Phase 2 of the Reserve Bank Act Review

The joint Treasury and Reserve Bank Team undertaking Phase 2 of the Government’s Review of the Reserve Bank Act has released the outline of how Phase 2 will proceed.

Consultation will run from November 2018 until late January 2019 to initially seek stakeholder views on the following topics set out in the terms of reference released by Minister of Finance Grant Robertson on 7 June 2018:

• Overarching objectives of the Reserve Bank set out in legislation

• Institutional governance and decision making

• The case for and against separation of prudential supervision from the Reserve Bank

• The case for and against depositor protection (including the option of deposit insurance)

• Reconsidering the regulatory perimeter of ‘bank’ regulation.

A consultation paper will be released in November seeking views on each of these topics.

Two further consultation periods are planned and will cover the remaining Review topics along with detailed policy options developed following the first consultation. At this stage, the next of these consultations is expected for the first half of 2019 with a final consultation expected later in the year.

Review Team Director, Bernard Hodgetts said: “Feedback and recommendations from the first consultation will help inform the Government’s preliminary views around any changes to the functions and role of the Reserve Bank.

“Many of the topics in the terms of reference are interdependent. We believe detailed work on areas like bank regulation and supervision, macro-prudential policy and trans-Tasman cooperation is best undertaken once the objectives, governance and decision-making structures of the Bank have been considered.

The Independent Expert Advisory Panel chaired by Suzanne Snively will continue to provide input into the Review to support the policy development process. The Minister has recently announced additional appointments to the panel, to include Barbara Chapman, Belinda Moffat and John Sproat.

“The Review of the Reserve Bank Act will be of interest to a range of stakeholders and the three month consultation process will be important in helping us deliver a robust set of recommendations from the review”.

Further updates, as well as consultation material, will be made available in due course on the review website - Phase 2 - Reviewing the Reserve Bank of New Zealand (RBNZ) Act

For general enquiries about the Reserve Bank of New Zealand Act Review, please email rbnzactreview@treasury.govt.nz.

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