Banking system oversight
The Reserve Bank registers and supervises banks in New Zealand for the purposes of promoting the maintenance of a sound and efficient financial system, and avoiding significant damage to the financial system that could result from the failure of a registered bank.
While the Reserve Bank monitors registered banks’ compliance with banking supervision policies, neither it nor the Government guarantees that a registered bank will not get into difficulty or fail.
Part 4 of the Reserve Bank of New Zealand Act 1989 (see Our legislation) places restrictions on the use of the words “bank”, “banker”, “banking” and their derivatives. Those restrictions do not apply to banks registered under Part 5 of the Act which establishes the Reserve Bank’s bank registration and supervision functions and sets out its related powers and the purposes for which those powers must be exercised.
The Banking Supervision Handbook
The Banking Supervision Handbook contains the policy documents and Orders in Council setting out the details of our banking supervision framework pursuant to Part 5 of the Act.
New and recent initiatives for banking policy
Initiative |
Description |
Timing |
Initiatives currently under development |
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The Reserve Bank is consulting on a legislative framework for the issuance of covered bonds. |
Submissions due 16 March 2012 |
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Dual registration |
The Reserve Bank is preparing a consultation document on the conditions of registration for banks that operate both a branch and a subsidiary in New Zealand |
Consultation expected in Q1 2012 |
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The Reserve Bank has issued a consultation document on extending its liquidity policy to New Zealand branches of overseas banks. |
Submissions due 30 March 2012 |
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The Reserve Bank is consulting on the pre-positioning requirements that banks will be expected to comply with to implement the Open Bank Resolution policy. |
Implementation plans due by end-February 2012 |
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The Reserve Bank is consulting on proposals to implement the core capital adequacy elements of Basel III in New Zealand. |
Submissions are due by 27 January 2012 |
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Recently implemented initiatives |
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From 31 December 2011, the Reserve Bank imposed a new condition of registration on locally incorporated banks relating to significant acquisitions. |
31 December 2011 |
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The Reserve Bank made changes to the capital requirements for farm lending for banks accredited to use internal models under the Basel II capital framework. |
New requirements applied from 30 June 2011 |
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The Reserve Bank has issued new disclosure requirements for registered banks |
31 March 2011 |
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The Reserve Bank released a new corporate governance policy for registered banks |
December 2010 |
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Future Policy Work |
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The Reserve Bank has decided to defer an increase in the core funding ratio to 75% to January 2013 and continues to monitor funding markets closely. |
2012 |
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Liquidity: Basel III |
The Reserve Bank will be reviewing its liquidity policy in light of new Basel Committee liquidity requirements. |
Q3 2011 – Q4 2012 |
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Capital adequacy: Basel III |
The Reserve Bank will review its capital adequacy framework in view of the non-core elements of Basel III (those not already consulted on) during 2012. |
Consultation likely Q2-Q3 2012. |
Basel II
- Information on the implementation of the Basel II capital adequacy framework in New Zealand is available here.
Bank registration information
The purpose of this bank registration information document (PDF 106KB) is to provide information and guidance to potential applicants for bank registration. It covers the policies and processes the Reserve Bank applies to bank registration, and the relevant laws and regulations.
Outsourcing Requirements
Find out about the Reserve Bank’s outsourcing requirements for banks.
Other banking supervision topics
Reserve Bank’s public submission to Basel Committee’s consultative proposals to strengthen the resilience of the banking sector (April 2010) (PDF 80KB)
Review of Trans-Tasman regulation
Review of financial products and providers including non-bank deposit-takers
Relationships with other domestic and international banking and financial system regulators
Use of the words “bank”, “banker”, “banking” and their derivatives
Banking supervision articles, speeches, and other general information
Banking supervision seminars and workshops
Related areas
For information on banks currently registered in New Zealand, including their credit ratings and links to their websites, see the New Zealand banks section of our website.
You will find information extracted from the Key Information Summaries disclosed by registered banks in our Banking system statistics section
The Financial Stability Report contains general information on current issues and recent developments the New Zealand banking system. Before 2004 these matters were reported on in each June issue of the Reserve Bank Bulletin.
Information about what the Bank would do in a crisis situation, can be found in our Crisis Management area.
If you have not found the information you seek, please try our Banking system frequently asked questions (FAQs)
