New foundations to strengthen and modernise the Reserve Bank

Release date
11 August 2021

The Reserve Bank of New Zealand - Te Pūtea Matua today welcomed the passing of new legislative foundations that will strengthen and modernise the way it operates and is governed.

The Reserve Bank of New Zealand Act (RBNZ Act) 2021 replaces the parts of the RBNZ Act 1989 that relate to the organisation’s high-level objectives, powers, functions, governance, and funding arrangements.

Key changes include the appointment of a new statutory Governance Board, whose work will start in mid-2022. The Board will be responsible for all decision-making except those related to the Monetary Policy Committee (MPC). The Governor remains chair of the MPC and will also sit on the future board.

To help prepare, the Minister will appoint some members of the new Governance Board as a “transition board”.

Reserve Bank Governor Adrian Orr said that he was looking forward to welcoming the Transition Board later this year, which will operate alongside the current RBNZ advisory board and pave the way for RBNZ’s new governance arrangements.

“As a central bank, our mandate has expanded significantly in the 30 years since the RBNZ Act was passed.

“Our new legislation clarifies what we’re here to achieve including promoting and protecting financial stability and ultimately the prosperity and wellbeing of all New Zealanders.

“We also welcome the new accountability and transparency settings as part of our role as kaitiaki (guardians) of the financial system, and we’re committed to meeting the high expectations that New Zealanders rightly have of us.”

Mr Orr said that now the final shape of the new RBNZ Act was confirmed, RBNZ could focus on its implementation with confidence.

“Strengthening Ngā Pūtake, our legislative roots, gives us a firm foundation for our continued evolution into a modern, agile and transparent central bank fit to serve Aotearoa in the future.”

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Oliver Bates
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