Treasury and RBNZ released the outline for the government's legislative review. Photo by Lynn Grieveson

The potential introduction of deposit insurance and the removal of prudential supervision are among the key issues to be addressed in the next stage of the Reserve Bank Act review.

A joint Treasury and RBNZ group today released the outline for the government’s legislative review. The team will issue consultation papers in November on five topics: headline legislative objectives; governance; separating prudential supervision from the RBNZ; depositor protection; and the regulatory perimeter of bank regulation. 

The team will then run a consultation between November and January seeking feedback on each of the topics. Two further rounds of consultation will then cover remaining subject areas – including supervision and enforcement, resolution and crisis management, macro-prudential policy, the bank’s own funding and resourcing – and detailed options from the first tranche of submissions. 

“Feedback and recommendations from the first consultation will help inform the government’s preliminary views around any changes to the functions and role of the Reserve Bank,” team director Bernard Hodgetts said in a statement. “Many of the topics in the terms of reference are interdependent. We believe detailed work on areas like bank regulation and supervision, macro-prudential policy and trans-Tasman cooperation is best undertaken once the objectives, governance and decision-making structures of the bank have been considered.”

Finance Minister Grant Robertson rounded out the membership of the independent advisory panel supporting the review on Friday. Former ASB Bank chief Barbara Chapman, Broadcasting Standards Authority head Belinda Moffat and former Chapman Tripp partner John Sproat will join chair Suzanne Snively and members Malcolm Edey and Girol Karacaoglu.

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