The Reserve Bank of New Zealand - Te Pūtea Matua is part-way through a review of access eligibility criteria to use our Exchange Settlement Account System (ESAS). Banks, other major institutions, and the Reserve Bank use ESAS to settle transactions between us. This is an update on that work for our website subscribers following Money, Cash and Payments Policy developments.

The project consulted in June and July on our proposed approach to the ESAS access risk framework. Today we have updated the ESAS Access Review consultation page on our website by publishing a summary of submissions and our response to them. We expect to publish submissions later in the year.

Feedback was largely positive and shows considerable demand - mainly from Non-Bank Deposit Takers (NBDTs) for access to ESAS for earning interest at the Official Cash Rate (OCR) and liquidity purposes only. This feedback raises the question of whether there should be two types of access to ESAS, for:

• payment services
• OCR and liquidity purposes.

NBDTs want direct access to an ESAS account as they currently have to hold funds with existing account holders (the large banks) which get the financial benefit. The feedback warrants further research to determine the opportunities and risks of enabling membership of ESAS for the specific purpose of having an OCR account. Because it is vital that ESAS maintains its high level of integrity and reliability, any decisions on changes to the access criteria will need to take into account any undue risk to the payments system that broadening access may cause.

We are working on the review's second consultation which will propose a revised ESAS access policy and criteria requirements, and we'll let you know when it's published and feedback invited, from early 2024.

Please email ESASAccessReview@rbnz.govt.nz if you have any questions.
 

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