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Financial system regulation in New Zealand

Dr Alan Bollard, Tim Ng

Alan Bollard, Governor, and Tim Ng, Manager, Financial System Policy, Reserve Bank of New Zealand. Speech presented to the Finance Sector Ombudsman Conference, 25 July 2003, Wellington, New Zealand. This paper discusses the Reserve Bank's role in the regulation of the financial system. It begins by outlying the importance of the "infrastructure" supporting financial activity - that is, the framework of applicable statutory law, administered policy, contracts, codes of conduct, corporate governance, and dispute resolution processes. Then, we discuss the Reserve Bank's objectives and our approach to the exercise of our powers. As the Reserve Bank is one of a number of financial regulators in New Zealand, we touch on how our responsibilities fit into the overall regulatory system applying to the financial sector. We make some observations about the special character of the New Zealand financial system, how it is changing, and the implications for financial regulators. Finally, we discuss some current policy work at the Reserve Bank on these issues.