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42-738: Like the Reserve Bank of New Zealand , the television service has, according to the State Services Commission , an unusual status as a stand-alone agency within the State sector that does not fall under any State sector category. While established by statute (the Maori Television Service Act 2003), it is not a Crown entity in any shape or form. The Act, however, does make the Service accountable in much

84-482: A Policy Target Agreement with the Minister of Finance . Policy Target Agreements are public documents and hence a government cannot secretly change the targets to gain a short term surge in economic growth. The mechanism of this is the official cash rate which affects short-term interest rates. The bank will provide cash overnight at 0.50% above the cash rate to banks against good security with no limit. Furthermore,

126-477: A bank uses another party to perform business functions that would traditionally have been undertaken by the bank itself. Common examples include IT processing, accounting, and call centers. The outsourcing policy aims to ensure that large banks have the legal and practical ability to control and execute outsourced functions. It ensures that outsourcing arrangements do not compromise a bank's ability to be effectively administered under statutory management and operate for

168-410: A competitor. OBR covers banks with local incorporation that have more than $ 1 billion in retail deposits. The OBR programme is voluntary for other registered banks to participate in. The goal of Macroprudential regulation is to reduce the likelihood of a financial crisis by limiting excessive lending during upturns and making banks and households more resilient during downturns. It focuses on risks to

210-729: A deposit insurance scheme. Under section 12 of the Insurance (Prudential Supervision) Act 2010 , the RBNZ is charged with the prudential supervision of the New Zealand insurance industry. This includes the licensing of persons to carry on insurance business in New Zealand. Under Part 5D of the RBNZ Act 1989 , the RBNZ was charged with the enforcement of the credit rating and prudential requirements applying to non-bank deposit takers (NBDTs) in New Zealand. These functions were introduced by

252-515: A few officials responsible for managing the Government's day-to-day financial affairs. In the 1920s the department took on a supervisory role over other departments’ spending and oversight of government borrowing. However, the most dramatic change to the role of the Treasury came in the 1950s when the department began to develop its role as economic advisor to the Government. The Treasury "hit

294-483: A more specific position of Treasurer of New Zealand . The role was created for Winston Peters by the Fourth National Government under Jim Bolger after the 1996 election, and abolished by Helen Clark’s government in 2002. Treasury has four main functions: The Treasury is one of New Zealand's oldest institutions, having been first established in 1840. Initially the Treasury consisted of just

336-555: A new Foreign Reserves Coordination Framework. 2021 also saw the Financial Market Infrastructures Act 2021 enacted, creating a regulatory regime for financial market infrastructures. In December 2023, the National-led coalition government passed the Reserve Bank of New Zealand (Economic Objective) Amendment Act 2023 which eliminated maximum sustainable employment as an objective of

378-683: A rule of thumb if there is more than half a bank note they will pay its full value. To receive payment people have to turn in the note to either the Reserve Bank in Wellington or any bank. New Zealand Banknotes are signed by the RBNZ Governor and before 1984, they were signed by the RBNZ Chief Cashier. The RBNZ has been evaluating the pros and cons of issuing a central bank digital currency since 2018. In April 2024,

420-492: A valid credit rating for their long-term, senior, unsecured obligations in New Zealand dollars. These ratings, provided by independent agencies, assess a bank's financial stability and likelihood of repaying its debts. The RBNZ maintains a register of these ratings for each registered bank, which are also disclosed in the banks' semi-annual statements. The RBNZ outsourcing policy, Banking Standard 11, applies to large New Zealand-incorporated registered banks. Outsourcing occurs when

462-467: Is accountable to Parliament and provides an annual dividend to the Government. The Reserve Bank's primary function, as defined by the RBNZ Act 2021 is to provide "stability in the general level of prices" and "maximum sustainable employment". The Reserve Bank is responsible for independent management of monetary policy to maintain price stability . The degree of price stability is determined through

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504-703: Is available on the UHF band to approximately four-fifths of Māori speakers , and to all New Zealand SKY Television satellite service subscribers. It is also available on the Freeview satellite service. This article related to the Māori people of New Zealand is a stub . You can help Misplaced Pages by expanding it . This article about an organisation in New Zealand is a stub . You can help Misplaced Pages by expanding it . Reserve Bank of New Zealand The Reserve Bank of New Zealand ( RBNZ ) ( Māori : Te Pūtea Matua )

546-543: Is based on fiat and fractional-reserve banking . In a fractional-reserve banking system, the largest portion of money created is not created by the Reserve Bank itself. Private sector commercial banks create 80% or more. The bank by virtue of the Reserve Bank Act has the sole right of issuing New Zealand legal tender notes and coins. The Reserve Bank controls the issuing of currency to banks and also replaces used and damaged money from circulation. In March 2005,

588-411: Is defined as any exposure that is 10% or more of a bank’s Tier 1 capital . For global systemically important banks (G-SIBs), the limit is stricter, capping exposures to other G-SIBs at 15% of Tier 1 capital. These regulations aim to prevent banks from incurring significant losses due to the default of a single counterparty or a group of connected counterparties. This helps in maintaining the stability of

630-632: Is the central bank of New Zealand . It was established in 1934 and is currently constituted under the Reserve Bank of New Zealand Act 2021 . The governor of the Reserve Bank, currently Adrian Orr , is responsible for New Zealand's currency and operating monetary policy . The Reserve Bank of New Zealand was established from 1 August 1934 by the Reserve Bank of New Zealand Act 1933 . The Reserve Bank first issued banknotes in 1934, see New Zealand pound . The Banking (Prudential Supervision) Act 1989 , which came into effect in February 1990, resulted in

672-599: Is the part of The Treasury responsible for managing the Crown's debt, its cash flows and its interest-bearing deposits. The 1988 reforms of the Government's financial management led to its establishment with the aim of improving the management of the Government's debt portfolio. Central Agencies Shared Services (CASS) is a shared services centre housed within the Treasury. Set up in March 2012, it provides information technology and management, human resources, and finance services to

714-617: The Bank and returned the Bank to its primary focus of managing price stability. The Reserve Bank Museum, based at the bank's headquarters in Wellington Central , has been open to the public since 2006. The Reserve Bank has been wholly owned by the New Zealand Government since 1936. The Reserve Bank is established by the Reserve Bank of New Zealand Act 2021 and has statutory independence. The Reserve Bank

756-546: The Banking (Prudential Supervision) Act 1989. All registered banks operating in New Zealand must issue a quarterly disclosure statement, which the Reserve Bank scrutinise. The purpose of these disclosure statements is to assist depositors to make sound decision and encourage banks to maintain sound banking practices The disclosure comprises: Under section 80 of the BPSA 1989, the RBNZ requires that all registered banks must have

798-774: The Crown in the running of these. This group includes what was the Crown Ownership Monitoring Unit (COMU, pronounced "co-moo") from November 2009 to February 2014, and before that the Crown Company Monitoring and Advisory Unit. The Treasury has courted controversy, particularly since the Rogernomics reforms of the 1980s. Given the agency's key influence and impact on fiscal policy, it has been accused by critics in recent years of inaccurate forecasts, regulatory capture and political partisanism, and accepting corporate gifts from

840-583: The Government passed the Reserve Bank of New Zealand Act 2021 , which created a new statutory governance board that was appointed by the Governor-General of New Zealand at the advice of the Government and Reserve Bank Governor. The RBNZA 2021 also designated the New Zealand Treasury as the bank's external monitor, mandated that the bank publish annual performance expectations and financial risk management statements, and establish

882-406: The RBNZ held a public consultation on the move toward a digital dollar. This digital currency would coexist with physical cash while offering privacy, security, and trust for users. The Reserve Bank from time to time produces limited runs of legal tender coins for collectors and have a New Zealand theme and design. These coins generally do not circulate, but are legal tender. The coins are sold for

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924-536: The Reserve Bank becoming independent of government control in RBNZ's role of managing monetory policy by introducing an inflation targeting mandate. New Zealand was the first country in the world to try this regime, which was later adopted in other countries. The Reserve Bank of New Zealand Amendment Act 2008 included amendments to the BPSA 1989 , including the introduction of capital requirements for deposit takers. The Non-Bank Deposit Takers Act 2013 gave RBNZ

966-671: The Reserve Bank via New Zealand Post 's business unit. The Reserve Bank is responsible for the Prudential regulation of the New Zealand banking system to ensure that the system remains healthy, however it does not guarantee that a bank will not fail, or face problems. As of April 2023 there are 27 registered banks. New Zealand-incorporated registered banks are required to maintain a minimum level of capital relative to their risk-weighted assets, measured by their Capital adequacy ratio . This helps ensure that banks have enough money to cover any losses they might incur. policy mandating

1008-643: The Reserve Bank: New Zealand Treasury The New Zealand Treasury ( Māori : Te Tai Ōhanga ) is the central public service department of New Zealand charged with advising the Government on economic policy , assisting with improving the performance of New Zealand's economy , and managing financial resources. The Minister responsible for the Treasury is the Minister of Finance of New Zealand ; however, from 1996 to 2002, there existed

1050-542: The Treasury's role being to provide central agency leadership, co-ordination and monitoring. Between 2008 and 2011 Treasury administered the Crown Retail Deposit Guarantee Scheme . Under the scheme the government bailed out nine finance firms including South Canterbury Finance to the value of approximately $ 2 billion. Today the Treasury employs 363 people, is the Government's lead advisor on economic and financial policy, and has

1092-629: The Treasury, the Department of the Prime Minister and Cabinet , and the Public Service Commission . Aside from providing these services, the goal of CASS is to set an example for other state sector organisations in sharing service delivery functions. The Crown owns many companies, including state-owned enterprises , Crown entities , and Crown Research Institutes . The Treasury's Commercial Operations group assists

1134-569: The bank decided to remove the 5 cent coin from circulation (the following year), as well as reducing the size of 10, 20 and 50 cent coins. The Reserve Bank accepts all New Zealand currency for payment at face value. This applies to all demonetised or withdrawn currency, however such currency need not be accepted by money changers as it is no longer legal tender. All decimal notes are legal tender except $ 1 and $ 2 notes as these have been withdrawn. Damaged notes are still worth something so long as they are recognisable. The Reserve Bank website notes that as

1176-505: The bank will accept deposits from financial institutions with interest usually at the official cash rate. Banks that offer loans at interest higher than the official cash rate will be undercut by banks that offer cheaper loans, and banks that loan out lower than the official cash rate will make less compared to other banks which can simply deposit their money in the Reserve Bank with a higher rate of return. The Reserve Bank borrows and offers loans with no limit on volumes in order to ensure that

1218-405: The bulk of its funding from the government via Vote Maori Affairs. Funding is provided directly to the service for its operational administrative costs. Programming is funded by Te Mangai Paho (The Maori Broadcasting Commission). The Service is able to commission its own programming from advertising funds. Māori Television started broadcasting in 2004. It was renamed Whakaata Māori in 2022. It

1260-422: The cost of a bank failure on the bank's shareholders and creditors, rather than taxpayers. Shareholders lose their investment first, followed by creditors if necessary. Creditor claims may be frozen to absorb losses, and they may suffer financial loss if the bank is unable to satisfy its obligations. In the absence of OBR, the only ways to deal with a bank failure are liquidation, government bailout, or acquisition by

1302-580: The enactment of the Reserve Bank of New Zealand Amendment Act 2008 . Under the NBDT 2013 the RBNZ acts as the prudential regulator and licensing authority for NBDTs. The Governor is accountable for the Bank’s performance in maintaining price stability, promoting a sound and efficient financial system, and meeting the currency needs of the public but retains statutory independence as to how these key outcomes are achieved. The following have served as governors of

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1344-507: The financial system as a whole. A Memorandum of Understanding between the Minister of Finance and the RBNZ Governor defines macroprudential policy and has guidelines for how we use the policy. The RBNZ is a member of the council, which promotes the coordination and harmonisation of trans-Tasman bank regulation, where appropriate. Its mandate also covers potential issues relating to financial stability, efficiency, and integration throughout

1386-445: The financial system by reducing the risk of cascading failures. 'Open Bank Resolution (OBR)' is a tool for dealing with a bank failure. OBR allows authorities to reopen a failed bank the next day under statutory control. It seeks to prevent abrupt disruptions to the bank's essential functions. while a long-term solution to the bank's failure is found, customers can promptly access their accounts to make and receive payments. OBR places

1428-489: The interest rate in the market remains at the official cash rate level. Through controlling this, the Reserve Bank can then influence short term demand in the New Zealand Economy and use this to control prices. Adjustments to the official cash rate are made eight times a year. It can make unscheduled adjustments but does not usually do so. Like all modern monetary systems, the monetary system in New Zealand

1470-496: The large exposures but also the 20 largest exposures, even if they do not meet the large exposure threshold. Connected exposures occur when multiple counterparties are linked through control relationships or economic interdependence. For example, if one company controls another, or if the financial health of one entity directly affects another, they are considered connected. The Basel Committee on Banking Supervision (BCBS) has set guidelines to limit large exposures. A large exposure

1512-436: The minimum amount that a commercial bank must hold in liquid assets. The liquidity policy of New Zealand's locally incorporated registered banks is primarily governed by two banking prudential requirements documents: 'Liquidity policy' (BS13) and 'Liquidity policy annex – liquid assets' (BS13A). These documents are part of the banks' conditions of registration. Additionally, reporting requirements are imposed under section 93 of

1554-463: The overall vision of helping governments achieve higher living standards for New Zealanders. Specific areas of work undertaken by the Treasury include: The Treasury serves 8 portfolios and 7 ministers. The Secretary to the Treasury is the public service head of the department. The role was created in 1873 when the offices of paymaster-general and under treasurer were amalgamated. Senior leadership The New Zealand Debt Management Office (NZDMO)

1596-489: The purposes of continuing to provide and circulate liquidity to the financial system and the wider economy. The bank must be able to facilitate basic banking services by any new owner of all or part of the bank. They must also address the impact of service or function provider failures on the bank's ability to carry on its business. Large banks must achieve specific outcomes, including: NZ registered banks are required to report their large exposures to RBNZ. This includes not only

1638-544: The role of prudential regulator and licensing authority for non-bank deposit takers. The bank's primary functions and responsibilities have been modified several times over its history. In 2018, the Labour-led coalition government passed the Reserve Bank of New Zealand (Monetary Policy) Amendment Act 2018 , which created the bank's monetary policy committee and codified "maximum sustainable employment" as an objective of monetary policy alongside price stability. In 2021,

1680-774: The same way as Crown entities. The principal reason for this approach is that the Maori Television Service is a partnership between the Crown and Maori. Maori interests were represented by Te Putahi Paho (the Maori Electoral College) who appointed four members of the Television Service's seven member board. The remaining three board members were appointed by the Government. Now Māori interests are represented by Te Mātāwai (a legislative group comprising representatives from Māori organisations and iwi ). The Maori Television Service receives

1722-554: The spotlight" in this role during a wave of far-reaching, and often controversial, economic reforms in the 1980s and early 1990s. This period also coincided with a general shift towards higher scrutiny of government activity and performance, making the Finance portfolio and Treasury operations more transparent. Since the 1950s, the Treasury has evolved from being a control agency to a "central agency". During this time, departments have become largely free to manage their own resources, with

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1764-541: The wider financial sector. Supervision The Reserve Bank largely follows the 2010 Basel III standards in implementing its bank capital requirements. In June 2023 the Deposit Takers Act replaced the RBNZ Act 1989 and the NBDTA 2013 as the foundational law regulating Deposit Takers (New Zealand banks, building societies and credit unions). It creates a single regulatory regime for all deposit takers and

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