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Banking supervision - defining the public sector role

Dr Don Brash

The Reserve Bank of New Zealand has been reviewing the role it plays in supervising registered banks. The review was initiated because it is now five years since the Bank assumed formal responsibility for the role and considered timely to review policies and practice in the light of experience. Such reviews are a normal part of the Bank's approach to its functions as part of the review, which is still continuing, the Bank participated in a seminar on banking supervision, held in Wellington in August and organised by the Institute of Policy Studies. Representatives of banks, accountancy and legal firms, economists and academics attended the seminar. The following was one of the papers delivered at the seminar. In this paper, Dr Brash explains the rationale for a public sector interest in banking, and the options [this raises] for public sector involvement.