Questions and answers are current as at 15 December 2023. If you have a question or would like to contact the Implementation Team, please email [email protected].
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Purpose and background |
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What was the background for the Deposit Takers Act? |
In November 2017, the Minister of Finance Grant Robertson announced a review of the Reserve Bank of New Zealand Act 1989 (the Review). Much had changed in the 30 years since the Act was first passed — both in the international financial environment and with financial system regulation. The goal of the Review was to modernise:
The first actions as a result of the Review updated the monetary policy framework including:
This was enacted in 2018 by the Reserve Bank of New Zealand (Monetary Policy) Amendment Act. The maximum sustainable employment objective has since been reversed. Reserve Bank of New Zealand (Economic Objective) Amendment Bill | legislation.govt.nz The second tranche of work updated the Reserve Bank’s financial stability role and broader governance arrangements when the Reserve Bank of New Zealand Act 2021 (the 2021 Act) passed into law in August 2021. Our previous legislation, the Reserve Bank of New Zealand Act 1989 was more than 30 years old. The new Act aims to modernise how we operate and are governed. It increases our accountability and transparency and brings us closer to what is required of Crown entities in terms of decision-making, reporting and external monitoring. The final piece of legislation is the Deposit Takers Act (DTA) which:
More information about the Reserve Bank of New Zealand Act 2021
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Who conducted the Review? |
A joint Treasury and Reserve Bank team undertook the Review, with governance from a steering committee co-chaired by the Treasury and the Reserve Bank. An Independent Expert Advisory Panel (the Panel) advised on key issues to support the work of the Review team and the steering committee. Find out more information about the Independent Expert Advisory Panel | treasury.govt.nz |
What steps were taken to develop the DTA? |
The Deposit Takers Bill was introduced to Parliament on 22 September 2022 and the Deposit Takers Act received Royal Assent on 6 July 2023. This follows the Finance and Expenditure Committee's consideration of the Bill. This material can be found on the New Zealand Parliament website. Read a copy of the Deposit Takers Act | legislation.govt.nz An exposure draft of the Deposit Takers Bill was released on 6 December 2021, with the deadline for submissions closing 21 February 2022. As part of the submission process, we ran workshops with banks and Non-Bank Deposit Takers (NBDTs) and met with several firms to address their queries on the Bill. Find out more about the submissions made on the exposure draft |
DTA purpose and decision-making principles |
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How do the DTA’s purposes and decision-making principles guide the exercise of powers and duties? |
The purpose clauses sets out the way the Bank intends to protect and promote the stability of New Zealand’s financial system. The purpose statement explains why the legislation was enacted, while the substantive provisions in the Act provide for what is required. In doing so, it shapes how the legislation is interpreted when there is uncertainty and the way in which the functions and powers provided for under the DTA are exercised. A set of decision-making principles also provides an opportunity to bring in a range of other considerations for the exercise of the powers in the DTA. |
What about efficiency? |
The Bank must have regard to the need to avoid unnecessary compliance costs. |