Reserve Bank of New Zealand Act 2021
Where we are right now
The Reserve Bank of New Zealand Act 2021 (the 2021 Act) passed into law in August 2021.
We are now working to implement the changes, including welcoming a Transition Board that will pave the way for our new governance arrangements.
Why we need a new Act
Our previous legislation, the Reserve Bank of New Zealand Act 1989, was more than 30 years old. The new Act focuses on modernising how we operate and are governed. Once implemented, it will strengthen our accountability and transparency, and bring us closer to what is required of Crown entities in terms of decision-making, reporting and external monitoring.
Strengthening Nga Pūtake — our roots — will ensure we continue our evolution into a modern, agile and transparent central bank which can enable all New Zealanders' future prosperity and economic wellbeing.
This video explains what’s changing and how we’re working to implement our new Act.
The main changes include:
- establishing a new governance board responsible for all decision-making (except decisions made by the Monetary Policy Committee)
- recreating the role of Governor as Chief Executive and as a member of our new Board
- introducing an overarching objective of financial stability — protecting and promoting the stability of New Zealand’s financial system
- requiring the Minister of Finance to issue a Financial Policy Remit that the Board must have regard to
- aligning more closely with wider state sector practice in terms of reporting and monitoring requirements, with the Treasury acting as the external monitor
- legislatively mandating the role of the Council of Financial Regulators to ensure the coordination of agencies which are responsible for regulating our financial system
- allowing the Minister to direct the Reserve Bank to maintain a minimum level of capital. This will allow the Minister to set a financial tolerance within which we can carry out our operations independently.