The Reserve Bank of New Zealand (RBNZ) has welcomed the Government’s formal response to the Finance and Expenditure Committee’s inquiry into banking competition, saying many of the recommended actions are already underway.
Acting assistant governor for financial stability, Angus McGregor, said the central bank agreed with the importance of a well-functioning and competitive banking system.
“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,” he said. “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.”
The Government’s response highlighted several workstreams already in progress, including the RBNZ’s review of capital settings, consultation on the use of the term ‘bank’, and its leadership in developing a payments modernisation strategy through the Future of Money and Payments programme.
McGregor said the RBNZ had also completed a range of initiatives aligned with the inquiry’s objectives. These include establishing a Financial Policy Committee to set key financial stability decisions, reducing the minimum capital requirement for deposit takers from $30m to $5m under the incoming Deposit Takers Act, expanding access to its settlement systems, and publishing guidelines on managing climate-related risks.
“We have noted the request from FEC for regular progress updates and look forward to contributing to that process,” McGregor said. “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.”