Macro-prudential policy - implementation
LVR restrictions were implemented in October 2013, and revised over time.
Debt serviceability restrictions, including debt-to-income (DTI) ratio limits, were added to the Reserve Bank’s Memorandum of Understanding (MoU) on macro-prudential policy with the Minister of Finance in August 2021. We have signalled our intention to consult in October on operationalising DTI restrictions and/or a floor on test interest rates.
The Reserve Bank will consult on any changes required to enable the operation of the remaining macro-prudential instruments – sectoral capital requirements and adjustments to the minimum core funding ratio – should the Bank decide they are necessary.
Between March and May 2013, the Reserve Bank consulted on the macro-prudential policy framework:
A new macro-prudential policy framework for New Zealand – final policy position (PDF 305KB) May 2013.
This reflected feedback received during the consultation on Macro-prudential policy instruments and framework for New Zealand.
Response to submissions received for the consultation on macro-prudential policy instruments and framework for New Zealand (PDF 207KB) May 2013.
The response to submissions summarised the submissions received, and set out the Reserve Bank’s response and policy implications.
Consultation paper on Macro-prudential policy instruments and framework for New Zealand (PDF 227KB) March 2013.
The consultation paper described and sought feedback on the proposed package of macro-prudential instruments. In addition to outlining the proposed instruments, the paper outlined the objectives of macro-prudential policy and the proposed decision-making, governance and accountability framework for the conduct of macro-prudential policy.
Background paper− Unpacking the toolkit: the transmission channels of macro-prudential policy in New Zealand (PDF 893KB) March
The consultation paper was accompanied by this background paper, which sets out the likely impact of the proposed instruments on the twin objectives of building financial system resilience, and reducing extremes in the financial cycle.