RBNZ to Lead Implementation of Deposit Takers Act
RBNZ announced that the Cabinet decision to adopt the final measures resulting from the Reserve Bank of New Zealand (RBNZ) Act Review will see drafting commence for new legislation, which is to be known as the Deposit Takers Act. The new legislation will create a single regulatory regime for all bank and non-bank deposit takers (such as building societies and finance companies) and will introduce a new deposit insurance scheme. RBNZ will lead the implementation of the new Deposit Takers Act. Deposit insurance is being prioritized ahead of the rest of the Act coming into effect and is expected to be up and running in 2023.
The adopted measures conclude a comprehensive review of the RBNZ Act and build on reforms already confirmed to update the objectives and decision-making processes of RBNZ. The new Act will broaden and clarify the scope of RBNZ role, which has evolved significantly since RBNZ began prudentially regulating banks more than 30 years ago. It modernizes the regulatory processes and instruments and provides important new enforcement tools to help RBNZ to manage emerging issues. The Deposit Takers Act will enable RBNZ to:
- establish the depositor protection scheme, which will apply to all institutions that take deposits and will offer protection of up to $100,000 per depositor, per institution in the event of a failure
- introduce a single regulatory regime for non-bank deposit takers and banks, with standards as the primary tool for setting requirements
- strengthen director accountability with penalties for non-compliance
- broaden supervision and enforcement tools (including a new power to conduct on-site inspections)
- strengthen and clarify the crisis resolution framework
The ongoing reforms will also include a new process for setting lending restrictions, such as loan-to-value ratios. Drafting of the legislation is underway, with public consultation on an exposure draft expected later this year. The Bill is expected to be introduced into the House in late 2021 and receive Royal assent in early 2023. After the Bill is enacted, a significant work program over several years will be required to implement the new prudential framework for deposit-takers. The deposit insurance provisions of the Act are targeted for introduction in 2023, ahead of the rest of the Act coming into effect. Further public consultation is expected on the funding framework before the scheme is implemented.
Related Links
Keywords: Asia Pacific, New Zealand, Banking, Deposit-Takers Act, Resolution Framework, Deposit Insurance Scheme
Previous Article
FED Updates Forms for FR Y-9C and FR Y-14Q ReportingRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
