New Zealand central bank to get new governance board after legislative changes

[WELLINGTON] New Zealand's central bank said on Wednesday a new statutory governance board will begin work at the bank in mid-2022 following legislative changes introduced by the government.

The Reserve Bank of New Zealand Bill was passed in Parliament on Tuesday, replacing parts of the RBNZ Act 1989 that relate to the central bank's high-level objectives, powers, functions, governance, and funding arrangements.

Key changes include the appointment of a new statutory governance board, which will be responsible for all decision-making except those related to the Monetary Policy Committee, the RBNZ said in a statement.

The Governor will remain chair of the Monetary Policy Committee, which determines New Zealand's interest rate settings, and will also sit on the future board.

Finance Minister Grant Robertson said after the bill was passed that the legislation would make New Zealand's financial system fit for purpose.

The new bill provides for a financial policy remit to be issued by the minister, setting out matters to which the Reserve Bank board must have regard, and also gives the minister the ability to direct the Bank to maintain a minimum level of capital, Robertson said.

To help prepare for the change, the minister will appoint some members of the new governance board as a "transition board", the RBNZ said.

"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," RBNZ Governor Adrian Orr said.

REUTERS