Reserve Bank consults on its role and its governance

Thursday 1 November 2018

Author: David Craig


The Reserve Bank and Treasury released a consultation paper earlier today seeking views on certain topics that fall within Phase 2 of the Government’s review of the Reserve Bank of New Zealand Act (RBNZ Act). Phase 1 of the review, which focused on the monetary policy framework, is largely complete.

The RBNZ Act has stood the test of time for almost 30 years, with accretive changes over that period but no substantial overhaul. The terms of reference of the Phase 2 review are sufficiently broad that a substantial overhaul is now possible, and perhaps inevitable.

Phase 2 will involve three rounds of consultation, and this paper starts the first round. Five broad topics are up for discussion:

  1. The high-level financial policy objectives of the Reserve Bank.

  2. The ‘regulatory perimeter’ of the Reserve Bank.

  3. The need for depositor protection.

  4. Whether the Reserve Bank’s central bank and prudential regulation functions should be separated.

  5. How the Reserve Bank should be governed.

Of these topics, the need for depositor protection, and the potential separation of central bank and prudential regulation functions, are particularly likely to generate debate.

Submissions can be made on the paper until 25 January 2019.

If you have any questions on the paper, or would like assistance with the preparation of a submission, please contact one of our banking and finance team or your usual Bell Gully adviser.


This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.

For more information
  • David Craig

    Partner Wellington
  • Hugh Kettle

    Partner Wellington
  • Murray King

    Partner Auckland
  • David McPherson

    Partner Auckland
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