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Reserve Bank Act Review

In 2017 the Reserve Bank began working with the Treasury on a comprehensive review of our previous legislation: the Reserve Bank of New Zealand Act 1989. This page gives an overview of the phases of the Review.

Published date:: 28 February 2022

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

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.

2. 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 sets out our high-level objectives, functions, powers, accountability and governance arrangements, and funding model.

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.