Reserve Bank of New Zealand Act 2021

Financial and accountability matters - Direction relating to Bank’s minimum level of capital and financial risk management

208: Power of Minister to direct Bank relating to minimum level of capital and financial risk management

You could also call this:

"The Minister can direct the Reserve Bank on money and risk management."

Illustration for Reserve Bank of New Zealand Act 2021

The Minister can tell the Reserve Bank what to do about having enough money and managing financial risks. You need to know the Minister can give directions to the Bank to keep a certain amount of money, which is called capital. The Minister can also tell the Bank what to expect when it comes to managing financial risks. The Minister's directions can include things like what counts as capital and how to calculate it. You can see that the Minister can also say what they expect the Bank to do to manage financial risks. This helps the Bank make good decisions about money and risks. The Minister has the power to give these directions to the Bank, and the Bank must follow them. This is an important part of how the Bank is managed and kept safe. It helps keep the country's money and economy 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=LMS468084.

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Part 5Financial and accountability matters
Direction relating to Bank’s minimum level of capital and financial risk management

208Power of Minister to direct Bank relating to minimum level of capital and financial risk management

  1. The Minister may direct the Bank to do either or both of the following:

  2. take all reasonable steps to maintain a minimum level of capital specified by the Minister:
    1. have regard to the expectations referred to in subsection (2)(c).
      1. The direction may do 1 or more of the following:

      2. define capital:
        1. specify other matters relating to the calculation of the minimum capital required:
          1. set out the Minister’s expectations as to the Bank’s financial risk management.