The Treasury commissioned RBNZ review finds strong case for reform, BusinessDesk
A review of the Reserve Bank's decision-making and governance by former State Services Commissioner Iain Rennie found a strong case for reform at the central bank that would strengthen its decision-making process and improve accountability, BusinessDesk reported.
The report identified four areas ripe for reform: formalising decision-making committees for monetary policy and financial regulation; formally acknowledging the broader remit of the bank in maintaining financial stability; narrowing the board's focus; and aligning legislation with practice.
The Rennie report was commissioned by the Treasury, which received it in April last year, but was only released on the government department's website yesterday with a selection of documents on the government's two-stage review into Reserve Bank Act chaired by Transparency International New Zealand chair Suzanne Snively.
Rennie recommended improving the clarity of the policy framework to develop a policy statement on financial sector regulation, establish separate decision-making committees for its monetary and prudential operations with ministerial appointments, have the State Services Commission advise on executive appointments, and release committee meeting minutes to improve transparency.
He also recommended narrowing the board's focus to monitoring the governor's performance rather than the dual role of monitor plus adviser.
"Overall, the proposals seek to evolve the RBNZ's legislative framework in a way that is both consistent with practice seen elsewhere in the New Zealand public sector and in central banks internationally that have similar spans of business to that of the RBNZ," Rennie said.
“Successful institutions seek to adapt in a timely fashion to changes in their environment and to developments in our knowledge about governance and decision making rather than have change forced on them in the aftermath of a significant performance failure."
Related stories:
RBNZ updates residential mortgage lending framework
Fixed mortgage rates drive market pickup
The report identified four areas ripe for reform: formalising decision-making committees for monetary policy and financial regulation; formally acknowledging the broader remit of the bank in maintaining financial stability; narrowing the board's focus; and aligning legislation with practice.
The Rennie report was commissioned by the Treasury, which received it in April last year, but was only released on the government department's website yesterday with a selection of documents on the government's two-stage review into Reserve Bank Act chaired by Transparency International New Zealand chair Suzanne Snively.
Rennie recommended improving the clarity of the policy framework to develop a policy statement on financial sector regulation, establish separate decision-making committees for its monetary and prudential operations with ministerial appointments, have the State Services Commission advise on executive appointments, and release committee meeting minutes to improve transparency.
He also recommended narrowing the board's focus to monitoring the governor's performance rather than the dual role of monitor plus adviser.
"Overall, the proposals seek to evolve the RBNZ's legislative framework in a way that is both consistent with practice seen elsewhere in the New Zealand public sector and in central banks internationally that have similar spans of business to that of the RBNZ," Rennie said.
“Successful institutions seek to adapt in a timely fashion to changes in their environment and to developments in our knowledge about governance and decision making rather than have change forced on them in the aftermath of a significant performance failure."
Related stories:
RBNZ updates residential mortgage lending framework
Fixed mortgage rates drive market pickup
