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Reserve Bank of New Zealand Act 2021

Preliminary provisions

4: Overview

You could also call this:

"About the Reserve Bank of New Zealand and what it does"

Illustration for Reserve Bank of New Zealand Act 2021

This Act is about the Reserve Bank of New Zealand. You will learn what the Bank does and how it works. The Act has different parts that explain the Bank's roles. The Bank has objectives like keeping the economy stable. You will see how the Bank works with the government and other organisations. The Bank also has a board and a Governor to make big decisions. The Act explains how the Bank manages money and foreign exchange. You will learn about the Bank's role in keeping the financial system safe. The Bank also issues bank notes and coins. The government oversees the Bank's work. You will see how the Bank reports to the government and the public. The Bank must follow rules and be accountable for its actions. The Act also talks about the Bank's powers and responsibilities. You will learn about the Bank's role in regulating financial institutions. The Bank works with other organisations to keep the financial system stable.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS286983.

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3: Purposes, or

"This Act helps the Reserve Bank support New Zealand's economy and people."

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5: Interpretation, or

"What special words mean in the Reserve Bank of New Zealand Act 2021"

Part 1Preliminary provisions

4Overview

  1. This section is a guide to the general scheme and effect of this Act.

  2. This Part deals with preliminary matters, including specifying the purposes of this Act and definitions of terms used in this Act.

  3. Part 2 provides for the continuation of the Reserve Bank of New Zealand (the Bank). The Part provides for—

  4. the Bank’s objectives, including the economic objective and the financial stability objective; and
    1. the Bank’s functions, including acting as New Zealand’s central bank, acting as a prudential regulator and supervisor of banks, insurers, and other financial institutions, and monitoring the financial system; and
      1. the Bank to be a body corporate with the power to do anything that a natural person may do; and
        1. the role of the Minister to oversee and manage the Crown’s interests in, and relationship with, the Bank; and
          1. a board to act as the governing body of the Bank; and
            1. a Governor of the Bank to be its chief executive and a member of the board; and
              1. a monetary policy committee (the MPC) to perform the function of formulating monetary policy.

                1. Part 3 relates to the Bank’s function to act as New Zealand’s central bank. This function includes—

                2. formulating (through the MPC) and implementing a monetary policy directed to the economic objective; and
                  1. managing foreign reserves and otherwise dealing in foreign exchange; and
                    1. issuing bank notes and coins in New Zealand; and
                      1. providing liquidity facilities; and
                        1. providing settlement accounts; and
                          1. operating or otherwise participating in payments and settlement systems.

                            1. Part 4 provides for operational matters, including—

                            2. Government directions to the Bank; and
                              1. an obligation on the Bank to be a good employer; and
                                1. protections from liability for the Bank and other persons; and
                                  1. providing for how the Bank enters into contracts and other enforceable obligations; and
                                    1. a power for the Minister to review the Bank’s operations and performance and a power for the Minister and certain other Ministers to request that the Bank supply information.

                                      1. Part 5 relates to financial and accountability matters for the Bank. The Part provides for—

                                      2. the Minister to issue a financial policy remit. The board must have regard to the remit under section 49; and
                                        1. the Minister to give directions to the Bank relating to its minimum level of capital and financial risk management; and
                                          1. the Minister and the Bank to enter into a funding agreement concerning the Bank’s expenditure; and
                                            1. the Bank to pay an annual dividend to the Crown; and
                                              1. reporting obligations, including a statement of intent, a statement of performance expectations, and an annual report; and
                                                1. other statements and reports to support accountability, including a statement about the Bank’s management of financial risks, a statement about its policies for acting as a prudential regulator and supervisor, and reports on the regulatory impacts of its policies.

                                                  1. Part 6 contains miscellaneous provisions, including—

                                                  2. a power for the Bank to gather information relating to its central banking and financial system oversight functions; and
                                                    1. a power for the Bank to share information; and
                                                      1. providing for the Council of Financial Regulators to facilitate co-operation and co-ordination between financial regulators; and
                                                        1. setting out regulation-making powers (including powers to prescribe fees and levies).

                                                          Notes
                                                          • Section 4(3)(a): amended, on , by section 5 of the Reserve Bank of New Zealand (Economic Objective) Amendment Act 2023 (2023 No 64).
                                                          • Section 4(4)(a): amended, on , by section 5 of the Reserve Bank of New Zealand (Economic Objective) Amendment Act 2023 (2023 No 64).