The aim of the Review
Updating and modernising the Reserve Bank of New Zealand Act 1989 (the Act) has been an important step in 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
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
Phase 2 of the Review
Phase 2 was 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 decided to replace the Act with 2 new pieces of legislation:
The Reserve Bank of New Zealand Act 2021
This Act sets out our high-level objectives, functions, powers, accountability and governance arrangements, and funding model.
Read more about our new Reserve Bank Act
The Deposit Takers Act
This Act 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.