Release date
17 September 2019

The Reserve Bank of New Zealand (RBNZ) and Financial Markets Authority (FMA) today released their findings on life insurers’ responses to the joint Conduct and Culture Review.
Overall, the regulators were disappointed by the responses. Significant work is still needed to address the issues of weak governance and ineffective management of conduct risk, identified in the regulators’ report earlier this year.
Rob Everett, FMA Chief Executive, said: “While we’re disappointed, we’re not surprised as the responses confirm what we found in our original review. It’s clear that progress has been slow and not as far-reaching as required.
Some providers have started work to identify the customer and conduct issues they face, others have not

Release date
17 September 2019

The New Zealand dollar (NZD) remains the tenth most traded currency globally, according to a global survey compiled by the Bank for International Settlements (BIS) released today.
The triennial survey took place in April and involved central banks and other authorities in 53 jurisdictions and close to 1300 banks and other dealers.
The NZD has held the number 10 spot since 2010. The US dollar retained the number one spot – being on one side of 88% of all foreign exchange (FX) trades – followed by the euro and the Japanese yen respectively.
Reserve Bank Assistant Governor and General Manager of Economics, Financial Markets and Banking Christian Hawkesby says New Zealand has had a high FX turnover to GDP ratio throughout history

Comment from Reserve Bank Governor Adrian Orr.
It was clear that even in the remote mountain region of the US state of Wyoming we were among the crowd.
The annual August Kansas Federal Reserve’s summit of many of the world’s central bankers vividly highlighted our commonality. Inflation has been low and stable, and many labour markets are near their peak loading. New Zealand included. Independent central banks have successfully achieved their inflation goals, promoting economic wellbeing.
Yet, there was no vigorous back patting. There were mostly furrowed brows.
A slowing global economic outlook, increasingly prompted by pockets of volatile politics, is keeping the world’s central bankers busy. In response to the economic chill, central banks around the world have lowered interest rates –

Release date
23 August 2019

The Reserve Bank and the International Monetary Fund are hosting a conference in Wellington next week to discuss broad issues around monetary policy, the labour market, and the future of inflation targeting.
Inflation Targeting: Prospects and Challenges has attracted delegates from around the world. It will be co-hosted by the Bank and the IMF’s Regional Office for Asia and the Pacific, and will be held at Te Papa Tongarewa on August 28 and 29.
While inflation targeting has had a history of success in delivering low, stable inflation and substantial macroeconomic stability over the past several decades, the last 10 years have proven to be challenging for monetary authorities.
RBNZ Assistant Governor and General Manager of Economics,

Release date
21 August 2019

Thirty years after the Reserve Bank adopted an inflation targeting regime to deal with inflation that was too high, central banks now have a different problem: inflation being too low.
At a panel discussion yesterday at the Bank for International Settlements forum at the Bangko Sentral ng Pilipinas, Manila, Reserve Bank Assistant Governor and General Manager of Economics, Financial Markets, and Banking Christian Hawkesby discussed Inflation Dynamics and whether they were ‘Upside Down Down Under’.
“One of the key challenges of our time is for central banks, academics and financial markets to comprehend this new environment and deliver the appropriate policy response,” Mr Hawkesby said.
“It is testing our understanding of what is

Release date
16 August 2019

The following comment, from Reserve Bank Governor Adrian Orr, has been supplied to Stuff.co.nz in response to an opinion piece from BusinessNZ chief executive Kirk Hope titled: ‘Business concerned by blurring of Government and Reserve Bank policy’
We are operationally independent, our mandate is clear, our goals are clear, and our decision making is transparent.
Given the long and variable lags between setting the Official Cash Rate and the impact on inflation and employment outcomes, our decision making is deliberately forward looking. We cannot, and do not, set the OCR based on current or historical inflation and employment outcomes. We scan the horizon and chart for the journey. We look ahead – not behind.
A read of our public

Release date
14 August 2019

The Council of Financial Regulators (CoFR) has announced a new vision for New Zealand’s economic wellbeing and has welcomed the addition of the Commerce Commission to the forum.
The new vision aims to contribute to maximising New Zealand’s sustainable economic wellbeing through responsive and coordinated financial system regulation, and allows for a longer term view that more effectively recognises the specific responsibilities of each agency.
CoFR works to identify and respond to issues of cross-agency relevance. CoFR’s members are the Reserve Bank, Financial Markets Authority, the Treasury, Ministry of Business, Innovation and Employment, and now the Commerce Commission. Responsibility for chairing CoFR alternates between the

Release date
12 August 2019

The Reserve Bank has today released new debt-to-income (DTI) data for new mortgage applications in New Zealand, showing how total borrower debt compares with borrower income.
The Reserve Bank developed DTI data to better understand risks to financial stability from mortgage lending activity. Monthly data is available from June 2017, and is sourced from a survey completed by all registered banks in New Zealand.
“Banks supply us with summary data on the debt and income of their new mortgage customers,” Head of Data and Statistics Steffi Schuster said.
“The DTI statistics we’re publishing today give an insight into the ability of homeowners to service their mortgages.”
DTI data is important to inform financial stability risks, as

Release date
12 August 2019

The Reserve Bank has today published a summary of submissions on its consultation proposing a new mortgage bond standard aimed at supporting confidence and liquidity in New Zealand’s financial markets.
Submissions on the new proposed mortgage bond standard are broadly supportive of the introduction of a high grade residential mortgage backed securities framework for New Zealand – known as Residential Mortgage Obligations (RMO).
The new standard aims to reduce contingency risks for the Reserve Bank as a lender of last resort, ensuring financial intermediaries supply sufficient high quality and liquid assets. The standard also aims to provide issuers and investors with an additional funding and investment instrument, supporting the

Tēnā koutou katoa, welcome all.
The Official Cash Rate (OCR) is reduced to 1.0 percent. The Monetary Policy Committee agreed that a lower OCR is necessary to continue to meet its employment and inflation objectives.
Employment is around its maximum sustainable level, while inflation remains within our target range but below the 2 percent mid-point. Recent data recording improved employment and wage growth is welcome.
GDP growth has slowed over the past year and growth headwinds are rising. In the absence of additional monetary stimulus, employment and inflation would likely ease relative to our targets.
Global economic activity continues to weaken, easing demand for New Zealand’s goods and services. Heightened uncertainty and declining international trade have contributed to lower

Release date
01 August 2019

The Reserve Bank has today published an exposure draft of the Financial Market Infrastructures Bill (FMI Bill), and is asking for feedback from stakeholders over the next eight weeks.
The FMI Bill covers vitally important financial systems for New Zealanders, including the infrastructure that supports our day-to-day transactions.
“This draft Bill comes as a result of three rounds of public consultation – the first two on the proposed framework as a whole, and the third was specifically on crisis management powers. As a result we now have a draft Bill that we think hits the mark in terms of powers and coverage, and we’re keen to hear if others agree,” says Geoff Bascand, Deputy Governor and GM Financial Stability.
Financial Market

Release date
16 July 2019

Almost 38,000 visits have been made to the Reserve Bank’s Financial Strength Dashboard since it was launched a year ago.
The Dashboard, released in late May 2018, is an innovative website designed to help depositors, investors and other stakeholders make well-informed decisions, when placing money with a bank, by displaying more than 100 individual metrics on the financial strength of banks that cover seven subject areas including Credit Rating, Asset Quality and Profitability.
The data on the Dashboard is updated quarterly and is more timely, of better quality and provides more detail than was previously available on its predecessor, the little-used ‘G1’ table.
The outcome of the first year of operations has been published in an

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Release date
11 July 2019

At a speech delivered in Auckland this morning to the Financial Services Institute of Australasia (FINSIA), Reserve Bank Governor Adrian Orr outlined the bank’s vision to be ‘a great team and the best central bank’. He also encouraged others to get involved in shaping this future.
“This is the appropriate time to outline the future of the Reserve Bank, and how the legislative changes under consideration will promote the prosperity and wellbeing of New Zealanders, and contribute to a sustainable and productive economy”.
Reflecting on the Government’s recent announcements about the review of the Reserve Bank Act, Mr Orr said, “I’m privileged to be the Governor and during my tenure the Bank has actively embraced change. We will continue

Release date
03 July 2019

The Reserve Bank has today released the review that it commissioned of its supervision of CBL Insurance Limited (CBL). The review relates to the Bank as regulator and supervisor of licensed insurers, and the Bank accepts all findings and recommendations for itself and the insurance regulatory regime.
CBL Insurance Ltd was placed into interim liquidation by the High Court in February 2018 on the application of the Bank and following an extensive investigation. This action was taken given the Bank’s concerns about imprudent management and breach of regulatory directions. The company was placed into full liquidation by the High Court in November 2018.
“The failure of CBL Insurance constitutes a significant regulatory event for New

Release date
01 July 2019

The Reserve Bank has today released submissions along with a Summary of Submissions (PDF 399 KB) on the latest consultation paper in its Capital Review, which proposes several measures to ensure a safer banking system for New Zealanders.
There was significant and wide-ranging media and public interest in the How much capital is enough? (PDF 545 KB) paper, with written feedback from 161 submitters. Feedback has also been received from analysts and other interested parties who did not make a formal submission.
“The Reserve Bank welcomes the large number of submissions on this consultation, as well as the effort and consideration that has gone into them,” Deputy Governor Geoff Bascand says. “We believe this shows how important this

Release date
01 July 2019

The Reserve Bank has refreshed its strategy for using macroprudential policy six years after its implementation.
At a conference hosted by Otago University, Deputy Governor Geoff Bascand said “financial stability is important for the wellbeing of New Zealanders, and macroprudential policy is a key line of defence for safeguarding financial stability. Our refreshed strategy on macroprudential policy provides us with greater clarity on how we will use macroprudential tools in the future, and provides New Zealanders with the confidence they need that the financial system is in good hands.”
When risks are heightened, the Reserve Bank uses macroprudential tools to complement other financial regulation, such as capital requirements. That

Release date
26 June 2019

The Reserve Bank’s approach to prudential regulation and supervision is being updated to ensure financial stability for future generations.
Talking at the Financial Markets Law Conference in Auckland, Deputy Governor / General Manager of Financial Stability Geoff Bascand said “Financial stability is vitally important to New Zealanders. The aim is to strengthen our ability to address vulnerabilities in the financial sector.”
“We are reviewing key regulatory requirements to boost the resilience of our banking and insurance sectors, and we are intensifying our supervision of financial institutions. In short, we are recalibrating the rules and our enforcement of them.”
Mr Bascand’s speech set out the Reserve Bank’s approach to financial

The Official Cash Rate (OCR) remains at 1.5 percent. Given the weaker global economic outlook and the risk of ongoing subdued domestic growth, a lower OCR may be needed over time to continue to meet our objectives.
Domestic growth has slowed over the past year. While construction activity strengthened in the March 2019 quarter, growth in the services sector continued to slow. Softer house prices and subdued business sentiment continue to dampen domestic spending.
The global economic outlook has weakened, and downside risks related to trade activity have intensified. A number of central banks are easing their monetary policy settings to support demand. The weaker global economy is affecting New Zealand through a range of trade, financial, and confidence channels.
We expect low interest

Release date
25 June 2019

The Reserve Bank of New Zealand is outlining its vision, purpose, and values which will ensure that we are well equipped to deliver on our commitments in the Statement of Intent 2019-2022 released today.
Reserve Bank Governor Adrian Orr said that the Bank is at a pivotal point in its 85 year history.
“We are operating against a backdrop of significant change – globally, culturally as an institution, and in the government’s and public’s expectations of us. We continue to build our capability to respond to, lead, and influence our rapidly changing environment.
“We want to be a Great Team and the Best Central Bank. To get there, we need to review the way we operate, the way we engage, and the way we think about and deliver our core

Release date
24 June 2019

The Reserve Bank has welcomed the release of in-principle decisions relating the Review of the Reserve Bank Act and is encouraging submissions in the consultation process.
The Ministers’ in-principle decisions and second set of consultation papers relating to Phase 2 of the Review were released today.
Reserve Bank Board chair Professor Neil Quigley said he is pleased with the direction of travel of the review. “The Bank is already moving in the direction reflected by the in-principle decisions, by investing in more regulatory capability and developing strategies and governance structures ready to support the future direction.”
“Financial stability is important for improving the wellbeing of all New Zealanders, and the regulatory

Release date
24 June 2019

News release issued by the Minister of Finance
The Coalition Government today announced moves to make New Zealand’s banking system safer for customers through a new deposit protection regime, and work to strengthen accountability for banks’ actions.

The in-principle decisions are part of Phase 2 of the Review of the Reserve Bank Act, which is making sure the 30-year old laws regulating our banking system are up to scratch.

“Now is the right time to check we have the tools to make sure banks meet their obligations to New Zealanders, and the powers to enforce them,” Grant Robertson says.

“The Government is also making sure New Zealand follows international best practice for promoting public confidence in our banking system, including

Release date
24 June 2019

The FMA and Reserve Bank of New Zealand said today that all banks had committed to remove sales incentives from frontline staff and their managers.
Last year’s report by the FMA and RBNZ on banking conduct and culture required banks to outline their plans to remove sales incentives in line with the following criteria:
Remove incentives linked to sales measures for salespeople and their managers, no later than the first performance year beginning after 30 September 2019; and
Revise incentives linked to sales measures through all layers of management.
Where banks do not commit to removing sales incentives, banks should demonstrate how they would implement controls to manage any conflicts or potential mis-selling.
FMA Chief

Release date
24 June 2019

The Reserve Bank is requesting two reports from ANZ New Zealand to provide assurance it is operating in a prudent manner.
Section 95 of the Reserve Bank of New Zealand Act 1989 gives the Reserve Bank the power to require a bank to provide a report by a Reserve Bank-approved, independent person. These reviews can investigate such issues as risk management, corporate or financial matters, and operational systems.
The first report will cover ANZ New Zealand’s compliance with the Reserve Bank’s current and historic capital adequacy requirements.
The second report will assess the effectiveness of ANZ New Zealand’s Director’s Attestation and Assurance framework, focussing on internal governance, risk management and internal controls.

Release date
21 June 2019

News release issued by the Minister of Finance

Experienced director Susan Paterson has been appointed to the Reserve Bank board, Finance Minister Grant Robertson announced today.

“Susan Paterson brings a wealth of private sector experience with her. She has also served on public sector boards, and has good knowledge of monetary policy as a former advisor to the Reserve Bank’s previous Monetary Policy Committee,” Grant Robertson said.

“She brings significant and senior governance experience, including on audit and risk committees, and good knowledge of governance oversight of a regulatory body.”

Susan Paterson’s term begins on 1 July. She replaces Keith Taylor who is retiring after two terms on the board.

The changes mean the

[unable to retrieve full-text content]If cash becomes less accepted and available as a means of payment, then the Reserve Bank says that New Zealanders who are already left out of the banking or digital worlds may be severely disadvantaged.

Release date
17 June 2019

Kristin School has taken out the top honours in the Reserve Bank of New Zealand’s 2019 Monetary Policy Challenge. Auckland Grammar School came second and Lynfield College placed third.
Designed to expand students’ understanding and appreciation of monetary policy, the Monetary Policy Challenge has been a long-standing competition organised by the Reserve Bank since 2002.
This year, 32 schools from across New Zealand participated and presented their monetary policy and Official Cash Rate (OCR) decisions through video submissions. Teams took into consideration the changes to the Reserve Bank’s monetary policy mandate—which now requires maximum sustainable employment to be considered alongside price stability.
Six teams were selected

Release date
13 June 2019

Te Pūtea Matua (the Reserve Bank of New Zealand) and Te Taura Whiri i Te Reo Māori (the Māori Language Commission) today signed a mahi tahi Memorandum of Understanding (MOU) to promote and embrace te reo Māori within the Central Bank.
The agreement, signed by Reserve Bank Governor Adrian Orr and Māori Language Commission Tumuaki (Chief Executive) Ngahiwi Apanui, signals the start of a strategic partnership that will allow both parties to take steps in accelerating the use and relevance of te reo Māori.
Mr Orr says the agreement is a significant step in strengthening the Bank’s commitment to Te Ao Māori (the Māori world).
“At the Reserve Bank of New Zealand, we recognise that te reo and tikanga Māori are central to the unique identity

Release date
05 June 2019

The Reserve Bank has significantly changed the way it makes monetary policy decisions, keeping itself in step with public expectations.
In a panel discussion last week at the Institute for Monetary and Economic Studies (Bank of Japan) in Tokyo, Reserve Bank Assistant Governor and General Manager of Economics, Financial Markets and Banking Christian Hawkesby talked about the importance of good decision making and governance, and of being credible and trusted, in achieving the long-term goal of improving wellbeing.
“We maintain our legitimacy as an institution by serving the public interest and fulfilling our social obligations. Keeping our ‘social licence’ to operate depends on maintaining the public’s trust that we are improving

Release date
31 May 2019

The Reserve Bank’s new format Monetary Policy Challenge is shaping up to be an exciting competition, with six schools progressing to the final round of the competition.
The six teams who have made it through to the finals of the 2019 Monetary Policy Challenge are Auckland Grammar School, Christchurch Girls’ High School, King’s College, Kristin School, Lynfield College, and Wellington Girls’ College. Auckland Grammar School was last year’s winning team while King’s College and Kristin School were also winners in previous years.
An updated format has been introduced to the challenge this year. In the first round of the competition, each team was required to submit a video presentation of their group delivering their Monetary Policy