Legislation aims to strengthen decision-making and accountability arrangements
Legislation aiming to update and strengthen the decision-making and accountability arrangements of the Reserve Bank of New Zealand (RBNZ) was passed in parliament earlier this week.
The Reserve Bank of New Zealand Bill, which the ruling Labour government said will reframe the central bank’s financial stability objective to “protecting and promoting the stability of New Zealand’s financial system,” was passed following its third reading in parliament.
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A key feature of the new bill is to bolster RBNZ’s decision-making capabilities by having all decisions other than monetary policy be made by a board rather than a single decision-maker – with the RBNZ governor as a member of the board.
The bill also aims to ensure RBNZ’s operational independence is “balanced with appropriate accountability – with changes to update the Reserve Bank’s accountability and reporting frameworks, such as aligning with the Crown Entity framework requirements for statements of intent and annual reports.”
“I am proud to see the passing of this important piece of legislation,” said finance minister Grant Robertson. “Not only does it modernise the more than 30-year-old Reserve Bank Act, the reforms support and protect the Reserve Bank’s independence while ensuring it operates in an accountable and transparent manner.”
In a release, the government said that, following Royal Assent, there will be a transition period to prepare for the new arrangements ahead of the bill’s anticipated commencement date of July 01, 2022.
