Summarised by Centrist
The Reserve Bank of New Zealand will create a Financial Policy Committee to strengthen oversight of the country’s banking system, and set prudential requirements for lenders, including decisions on mortgage lending ratios.
The move follows recommendations from a recent parliamentary inquiry into banking competition. It comes as the government aims to boost competitiveness in a sector dominated by four Australian-owned banks, ANZ, ASB, BNZ, and Westpac.
The new committee will include the RBNZ chair, governor, three board members, and up to two external experts. It will be operational by early 2026, according to the bank.
Deputy chair Rodger Finlay said the committee would “strengthen financial policy-making at the RBNZ, with greater focus and expertise” to ensure the financial system “remains strong and stable.”
The RBNZ has also signalled a softer regulatory stance, after proposing in August to ease capital requirements on lenders amid criticism that earlier rules restricted credit and raised borrowing costs.
