Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


RBNZ releases outsourcing policy for banks

18 January 2006

RBNZ releases finalised outsourcing policy for banks

The Reserve Bank today published its finalised policy on the requirements which will apply to large New Zealand banks that have entered into outsourcing arrangements. The final policy follows consideration of comments on a draft policy issued in October 2005.

Reserve Bank Deputy Governor Adrian Orr said: "While outsourcing of banks' business functions is increasingly common and often a sensible business practice, it can expose banks and the financial system to new or increased risks that must be managed appropriately. Under the Reserve Bank's policy, outsourcing is permitted so long as it does not undermine a large bank's ability to continue to provide core liquidity, payment and transaction services both in good times and under stress."

"Failures of banks and of service providers to banks are low-probability events, but they can have a potentially high and immediate impact across the economy. The outsourcing policy provides safeguards to the stability of the New Zealand financial system against the possibility of such occurrences.

"Consistent with our earlier proposals, the policy focuses on ensuring that the boards of large New Zealand banks maintain the legal and practical ability to control outsourced functions so that the banks can continue to provide critical services in a crisis situation. The policy also requires the boards to exercise meaningful control and oversight over the bank's chief executive and staff."

Mr Orr commented that "the policy maintains our approach of focusing on the outcomes we require of banks, rather than being prescriptive about banks' systems. This approach allows banks more flexibility in meeting the requirements and means that the policy will not involve excessive costs for them. The emphasis also remains on bank directors managing outsourcing risk as part of their normal business processes".

The Reserve Bank will now work on implementation of the policy with those banks that are subject to it. Implementation will take into account each bank's individual circumstances and investment cycles.

The final policy and associated documentation is available at


© Scoop Media

Business Headlines | Sci-Tech Headlines


Onetai Station: Overseas Investment Office Puts Ceol & Muir On Notice

The Overseas Investment Office (OIO) has issued a formal warning to Ceol & Muir and its owners, Argentinian brothers Rafael and Federico Grozovsky, for failing to provide complete and accurate information when they applied to buy Onetai Station in 2013. More>>


Tomorrow, The UN: Feds President Takes Reins At World Farming Body

Federated Farmers president Dr William Rolleston has been appointed acting president of the World Farmers’ Organisation (WFO) at a meeting in Geneva overnight. More>>


I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>


Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>


Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>


Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news