This page contains information on Regulatory cooperation from the May 2021 Financial Stability Report.
The Reserve Bank works closely with other agencies in New Zealand, in Australia and across the world. This is to enable knowledge sharing, collaboration and coordination on key issues, and to support resolution in times of uncertainty. We recognise the need to constantly develop and foster new relationships and broaden our networks to achieve our objectives.
Within New Zealand, the Reserve Bank and the Financial Markets Authority jointly chair the Council of Financial Regulators (CoFR), which brings together the chief executives of key regulatory agencies to deliver effective and responsive regulation of the financial system.8 The Reserve Bank of New Zealand Bill – currently with Parliament – will put CoFR on a statutory basis.
CoFR agencies worked closely together during COVID-19 to refocus their regulatory initiatives and allow the financial sector to concentrate on supporting its customers. CoFR agreed a joint approach to restarting initiatives in a coordinated way. CoFR is particularly aware of the need to identify key regulatory overlaps and gaps and actively manage them to create greater coherence and consistency among regulators. For example, the Reserve Bank has worked with other agencies to create a one-stop advisory service to help new financial technology (FinTech) firms navigate the New Zealand regulatory landscape.
CoFR has recently agreed on a risk-based approach to its work, based on a series of overarching themes that impact all New Zealanders (climate change and transition risks, conduct, digital and innovation, inclusion and access, regulatory burden and barriers to entry).
CoFR is developing a new memorandum of understanding to encourage information sharing and collaboration between member agencies, building on existing good practice.
The Reserve Bank works particularly closely with its counterparts in Australia, both bilaterally and through the Trans-Tasman Council on Banking Supervision. In 2020 the Council engaged more frequently to discuss the policy and regulatory challenges arising from COVID-19 and the related response and recovery measures.
The Reserve Bank is an active member of the Executives’ Meeting of East Asia-Pacific Central Banks, and currently chairs its Working Group on Payments and Market Infrastructures.
The Reserve Bank makes a positive contribution to discussions at other international bodies such as the Bank for International Settlements and the International Association of Insurance Supervisors.
The Reserve Bank works closely with other organisations on climate change and related challenges, both within New Zealand and internationally, to ensure that the financial sector contributes effectively to the management and mitigation of climate risks. The Reserve Bank is a proud member of and contributor to the Network for Greening the Financial System and the Sustainable Insurance Forum.
Our Pacific Remittance Project work continues, with support from the Ministry of Foreign Affairs and Trade. This looks at addressing challenges facing remittance services domestically and in the South Pacific region. Regionally, the key focus has been on a collective effort with South Pacific central bank governors, the International Monetary Fund and other international partner agencies to develop a regional ‘Know Your Customer’ facility. Domestically, we are also exploring with relevant agencies potential policy, legislative and regulatory changes around anti-money laundering and countering the financing of terrorism issues. Both work streams involve working with banks and remittance service providers.
Another example of international cooperation is our work on indigenous inclusion. We recently announced that the Reserve Bank would be chairing a new international Central Bank Network for Indigenous Inclusion, focusing on indigenous economic research and participation within the central banking community. The network to date includes the Reserve Banks of New Zealand and Australia, and the Bank of Canada, with others to join over time.
In the coming year, as set out in the Reserve Bank’s 2020/21 Statement of Intent, we will continue to focus on effective engagement and cooperation, both domestically and internationally.
- 8 The other members of CoFR are the Commerce Commission, the Treasury and the Ministry of Business, Innovation and Employment.