Central bankers must continue working to guard against the unpredictable, Reserve Bank of New Zealand (RBNZ) deputy governor Geoff Bascand said in a speech published by the central bank.
Bascand (pictured above) joined RBNZ in 2013 during the aftermath of the Global Financial Crisis. Prior to that, he was government statistician and chief executive of Statistics New Zealand and held senior management roles in the Department of Labour and the New Zealand Treasury. He will depart from RBNZ in January.
“I’ve learned that, in the business of central banking, calm seas are rare,” Bascand said. “The single most important thing we as central bankers can do is to ensure the economy and the financial system, in particular, is highly seaworthy at all times. This means building resilience, maintaining private sector and public-policy buffers that can be drawn on when required, and having enough policy flexibility to be able to exercise a variety of tools and settings when needed.”
According to Bascand, RBNZ’s policy focus in recent years has been to strengthen resilience and compliance of the entities it regulates, such as banks, insurers and non-bank deposit takers.
The continued identification of historical compliance issues means that firms must continue to pursue positive assurance processes and lift investment in systems, processes and compliance, he said.
Bascand predicted that, over the next 10 years, the New Zealand financial sector will place more importance on efficiency, industry dynamics, technological innovation and meeting customer needs. Regulators will also have to face issues regarding insurance affordability and risk-based pricing, open banking and digital money.
“While our work is never done, we can take pride in the steps taken,” Bascand said. “I am confident our financial stability approach has strengthened, the foundations are more solid, and most of all our broader sector and industry engagement stand us in good stead to keep learning from one another.”