The New Zealand government has announced that it plans to expand its powers to monitor banks and hold directors and executives accountable for their actions as part of the second phase of the Labour-led coalition government’s review of the legislation covering the Reserve Bank of New Zealand (RBNZ).
Finance Minister Grant Robertson said the government aims to establish a governance board to oversee financial stability matters and introduce transparency at the central bank.
“New Zealand has a strong and stable banking system, but it is regulated by laws that are 30 years old. We’re making sure they’re up-to-date,” Robertson said, as reported by Reuters.
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The government also plans to introduce a deposit insurance scheme limit of $50,000 per institution to ensure that more than 90% of depositors would be fully covered while others would have most of their deposits covered.
RBNZ Governor Adrian Orr said they welcome the proposed changes.
“These decisions strike a balance between maintaining the independence of the Bank and ensuring there is greater transparency and accountability about the Bank’s work,” Orr said in a statement.
Consultations on the government’s plans will resume next year.
