Reserve Bank Act Review

We’ve been working with the Treasury since 2017 to review our foundational legislation: the Reserve Bank of New Zealand Act 1989. This page gives an overview of the phases of the Review.

The aim of the Review

Updating and modernising the Reserve Bank of New Zealand Act 1989 (the Act) is an important step towards ensuring we can fulfil our role as kaitiaki | guardians of the financial system, promoting the prosperity and economic wellbeing of all New Zealanders.

What’s happened so far

1. Phase 1 of the Review (monetary policy)

The first phase of the Review focused on monetary policy and was completed in 2018. It resulted in a range of changes being made to New Zealand’s monetary policy framework in 2019 including:

  • amending the objective of monetary policy to require us to consider maximum sustainable employment alongside price stability when making decisions on monetary policy
  • establishing a monetary policy committee which includes external representation
  • adding greater transparency, accountability and rigour to decision-making, with a formal remit, charter and code of conduct in our monetary policy framework.

Read more about the current monetary policy committee

Read more about the monetary policy remit, charter and code of conduct

2. Phase 2 of the Review

Phase 2 has been a wide-ranging review of our governance arrangements and funding model. It also included the Act's financial policy provisions and our role as regulator of the deposit-taking sector.

Following public consultation, the Government has decided to replace the Act with 2 new pieces of legislation:

  1. The Reserve Bank of New Zealand Act 2021: this sets out our high-level objectives, functions, powers, accountability and governance arrangements, and funding model.

Read more about the new Reserve Bank Act

  1. A Deposit Takers Act which will create a single, regulatory regime for all bank and non-bank deposit takers (such as building societies and finance companies). It would also establish a deposit insurance scheme to protect New Zealanders’ money held by licensed deposit takers.

Read more about the proposed Deposit Takers Act

Related news

RBNZ Act timeline

RBNZ Act Timeline

2017 Review of the RBNZ Act 1989 announced

  • Phase 1 Monetary Policy
  • Phase 2 Financial policy, governance and funding arrangements

2018 Phase 1 of Review completed

June

  • Phase 2 of review begins: Financial policy, governance and funding model
  • Some provisions split off into proposed Deposit Takers Act

November

Consultation on Bill content begins

2019 RBNZ Monetary Policy Amendment Act

April

Monetary Policy Amendment Act establishes MPC and new maximum sustainable employment objective

August

  • Consultation on the Bill content ends
  • Drafting of the Bill commences

2021 RBNZ Bill

July

RBNZ Bill introduced into Parliament

December

First reading in Parliament

2021

February

Review of public submissions by FEC

June/July/August

  • FEC recommends any amendments to Cabinet
  • Second reading in Parliament
  • Committee of the whole House
  • Third reading in Parliament
  • Royal Assent – Bill becomes RBNZ Act 2021

RBNZ Act 2022

July

RBNZ Act Implemented