The RBNZ Board will establish a new group within the Board known as the Financial Policy Committee (FPC).
The FPC will have the power to make important policy decisions concerning financial stability, including establishing prudential requirements for financial institutions overseen by the RBNZ and determining macro-prudential policies such as debt-to-income and loan-to-value limits for lending.
The FPC will be composed of the RBNZ Board Chair, the Governor, three additional RBNZ Board members, and up to two individuals who are neither RBNZ Board members nor RBNZ employees.
The external members will be acknowledged specialists in areas pertinent to the FPC’s responsibilities.
“The creation of the FPC will strengthen financial policymaking at the RBNZ, with greater focus and expertise brought to bear to make sure that the New Zealand financial system remains strong and stable,” RBNZ Board Deputy Chair Rodger Finlay said.
“The decision to create the FPC followed engagement with the Treasury and Minister of Finance on ways to apply greater expertise and experience to financial policy decisions. A committee with formal policy decision-making authority from the RBNZ Board and credible external experts was seen to achieve this outcome.”
“We look forward to receiving applications from experts who can give us independent perspectives and constructively challenge policy proposals,” Finlay added.
The establishment of the FPC aligns with the recommendations from the Finance and Expenditure Committee’s recent inquiry into banking competition to strengthen the RBNZ’s financial policy-making.