This page is an overview of the legislation that provides us with our responsibilities and powers.
Renewing our Reserve Bank Act
Our foundational legislation is the Reserve Bank of New Zealand Act 2021 (RBNZ Act 2021) which sets out our purpose, objectives and functions as the central bank of Aotearoa.
In 2017, the Government commissioned a comprehensive multi-year review of our previous RBNZ Act 1989. The aim was to ensure New Zealand continued to have a modern and fit-for-purpose monetary and financial policy framework for the future.
The review involved extensive public consultation and was jointly carried out by the Reserve Bank and the Treasury, supported by an independent advisory group.
Read more about the Reserve Bank Act Review
In 2018, this led to the passing of a new Amendment Act 2018 which created our monetary policy committee (MPC) and added ‘maximum sustainable employment’ as an objective of monetary policy alongside price stability.
Find out more about the RBNZ (Monetary Policy) Amendment Act 2018
Our new Reserve Bank of New Zealand Act
The parts of the 1989 Act relating to our institutional arrangements have been replaced with new legislation – the Reserve Bank of New Zealand Act 2021. The new Act updates our high-level objectives, functions, governance and funding arrangements, and came into force on July 2022.
Find out more about the Reserve Bank of New Zealand Act 2021
Drafting of Deposit Takers Bill underway
The parts of the 1989 RBNZ Act relating to our regulation and supervision of banks will eventually be replaced by a new Deposit Takers Act. It will create a single regulatory regime for all deposit takers and a deposit insurance scheme.
A Bill will be introduced to Parliament next year following publication of an exposure draft for public consultation.
Find out more about the proposed Deposit Takers Act
New regime for financial markets infrastructures
We are also transitioning to new legislation that will create an enhanced regulatory regime for financial markets infrastructures (FMIs). These are systems that facilitate non-cash payments and financial market transactions.
The Reserve Bank and Financial Markets Authority (FMA) jointly regulate FMIs and are working together to implement the Act over an approximate 18-month transition period.
Find out more about the Financial Market Infrastructures (FMI) Act 2021
We also have powers and functions under other legislation:
- Banking (Prudential Supervision) Act 1989 which provides for our role as prudential supervisor of the banking sector*
- Non-bank Deposit Takers Act 2013 under which we act as the prudential regulator and licensing authority for non-bank deposit takers (this will eventually be replaced by the Deposit Takers Act creating a single regulatory regime for all deposit takers, as well as a new deposit insurance scheme.).
- Insurance (Prudential Supervision) Act 2010 under which we issue licences to insurers operating in New Zealand and supervise licensed insurers.
- Anti-Money Laundering and Countering Financing of Terrorism Act 2009 under which we ensure that banks, life insurers and non-bank deposit takers comply with the Act
- Financial Market Infrastructure Act 2021 which provides for our role as prudential regulator and supervisor of financial market infrastructure, alongside the Financial Markets Authority.
*The parts of the RBNZ Act 1989 relating to prudential supervision of banks have been renamed the Banking (Prudential Supervision) Act 1989.
Our Bulletin series contains articles on legislation and changes that have occurred over time.