RBNZ gets stronger legislative foundations

  • By Zilla Efrat

The Reserve Bank of New Zealand Act 2021 comes into effect today, replacing previous legislation that was more than 30 years old.

It also ushers in a new statutory governance board responsible for all decision-making, except decisions reserved for the monetary policy committee.

The eight-member governance board replaces the previous advisory board and is chaired by Professor Neil Quigley, who over the past nine months has also led the interim transition board overseeing preparations for the changes required under the Act.

“The next few years will be a critical period for the organisation,” says Professor Quigley. “Expectations of central banks globally have never been higher, and New Zealanders are looking to us to deliver a strong and stable financial system and help steer the economy through what will undoubtedly continue to be challenging times ahead.”

RBNZ Governor Adrian Orr says the strengthened legislative foundations are a significant step in the RBNZ’s wider transformation efforts under which it is evolving into a modern, agile, fit-for-purpose central bank.

“We have strong leadership and exceptionally capable people, and I have full confidence in our readiness to meet the increased levels of accountability and transparency required of us,” says Orr.

“This includes releasing our new Statement of Financial Risk Management later this month and Statements of Prudential Policy, Intent and Performance Expectations in August. These key strategic documents set out how we approach our work, what we aim to achieve, and how we measure our performance.”