Author/Editor:

International Monetary Fund. Monetary and Capital Markets Department

Publication Date:

May 10, 2017

Electronic Access:

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Summary:

New Zealand has a strong institutional framework for macroprudential policy. This framework is based on a clear mandate for financial stability operationally clarified by a Memorandum of Understanding (MoU). The Reserve Bank of New Zealand (RBNZ) is the single prudential regulator with responsibilities and powers for the supervision of financial institutions and macroprudential policies. The MoU on macroprudential policy signed between the RBNZ and the Minister of Finance legitimized the macroprudential use of the existing prudential instruments and further strengthened the responsibility of the RBNZ on macroprudential policy by providing additional clarity around the broad parameters of the policy, such as the objectives, governance and instruments. The clear mandate for financial stability, independent decision making, transparent communication and external accountability form the basis of the strong framework put in place.

Series:

Country Report No. 17/118