Reserve Bank Welcomes Government Response To FEC Banking Inquiry

The Reserve Bank of New Zealand (RBNZ) welcomes the Government’s formal response to the recent Finance and Expenditure Committee (FEC) inquiry into banking competition.

“As the Government response notes, some of the FEC recommendations are directed to areas where The Reserve Bank of New Zealand - Te Pūtea Matua is the decision maker,” said Angus McGregor, Acting Assistant Governor of Financial Stability.

“We see a stable, competitive and efficient banking system as a vital part of a healthy economy and we are pleased that we have already made progress on many of the FEC’s recommendations.”

Key parts of the RBNZ’s ongoing work programme highlighted in the Government’s response include the in-progress review of capital settings; consultation on the use of the term ‘bank’; and leading the development of a payments modernisation strategy as a part of our Future of Money and Payments work.

Recently completed work includes establishing a Financial Policy Committee to make key financial stability decisions; reducing the minimum capital requirement for deposit takers from the current $30m to $5m when the Deposit Takers Act comes into force; expanding access to our settlement systems; and published guidelines for managing climate related risks.

“We have noted the request from FEC for regular progress updates and look forward to contributing to that process. We are also looking forward to working with our fellow regulators and Treasury to continue to promote a financial system that supports a productive economy and the wellbeing of all New Zealanders,” said Mr McGregor.

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