Plain language law

New Zealand law explained for everyone

Deposit Takers Act 2023

Miscellaneous - Trans-Tasman co-operation

440: Bank’s duty to consult

You could also call this:

"Banks must talk to financial experts before making big decisions that could hurt the economy."

Illustration for Deposit Takers Act 2023

If the Bank thinks an action it wants to take will hurt Australia's financial system, this section applies to you. The Bank must talk to and consider the advice of Australian financial authorities before taking the action. You can find similar rules in the Reserve Bank of New Zealand Act 1989. The Bank will do this as much as it can, considering how urgent the situation is. The Bank chooses which authorities to talk to, based on what it thinks is relevant.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS497928.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
Previous

439: Trans-Tasman co-operation, or

"Working with Australia to keep their financial system stable"

Next

441: Failure to comply with subpart does not affect validity of Bank’s actions, or

"Mistakes with rules don't stop a bank's actions from being valid."

Part 8Miscellaneous
Trans-Tasman co-operation

440Bank’s duty to consult

  1. This section applies if the Bank has reasonable cause to believe that an action it proposes to take under this Act or any other prudential legislation is an action that is likely to have a detrimental effect on financial system stability in Australia.

  2. Before taking the proposed action, the Bank must, to the extent it considers reasonably practicable in the circumstances having regard to urgency or any other similar constraint, consult and consider the advice of every Australian financial authority it considers to be relevant in the circumstances.

Compare