Submissions are welcome until April 14, 2022
The Reserve Bank of New Zealand - Te Pūtea Matua is seeking feedback on proposed changes to its liquidity policy for registered banks.
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The liquidity policy aims to strengthen financial stability by lowering the likelihood of liquidity problems affecting banks, and improve their ability to manage such problems, said Christian Hawkesby, deputy governor and general manager of financial stability.
“Although we believe our existing liquidity policy remains broadly fit for purpose, it has not been comprehensively reviewed since it was implemented in 2010,” Hawkesby said. “Since that time, an international liquidity framework has been developed and implemented overseas. There have been a number of significant developments that support the case for reviewing the policy now, including our recent Liquidity Thematic Review and Liquidity Stress Tests, as well as the COVID-19 pandemic.”
The central bank said it is planning to consider whether its liquidity policy should also capture banks that are operating in New Zealand as branches, and, in due course, how it should apply to a broader set of deposit takers under the upcoming Deposit Takers Act.
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The consultation paper for the Liquidity Policy Review sets out the proposed issues and scope for the review, and contains the proposed principles to be used to guide the review and RBNZ’s decision-making. Submissions are welcome until April 14.
