New committee to shape housing, bank capital and risk
The Reserve Bank (RBNZ) has strengthened its financial‑stability framework, appointing two new external members to a powerful committee that will oversee key macroprudential tools, including loan‑to‑value (LVR) and potential debt‑to‑income (DTI) restrictions.
Following an open recruitment process, the RBNZ board has appointed Heidi Richards and Prasanna Gai as external members of the new Financial Policy Committee (FPC).
The move comes just months after the IMF urged the RBNZ to fully deploy its macroprudential toolkit – including the loan‑to‑value and debt‑to‑income limits introduced last year – in response to New Zealand’s tendency toward rapid housing credit growth and already high household leverage.
New FPC to drive macro‑prudential and prudential decisions
The FPC is a new committee of the RBNZ board that will make “key policy decisions relating to financial stability, including setting the prudential requirements for financial institutions regulated by RBNZ, and making macro-prudential policy decisions such as debt-to-income and loan-to-value ratios for lending.”
“I am pleased with the appointments to the FPC that we are announcing today, and welcome Ms Richards and Professor Gai to the FPC,” RBNZ Board Chair Rodger Finlay said in a media release.
“The FPC’s work will be crucial to promoting New Zealand’s financial stability and the wealth of experience of all the FPC members will enhance and bring focus to RBNZ’s financial policymaking.
“I would also like to express my gratitude to all those who expressed their interest in serving as external members of the FPC. Ms Richards and Professor Gai were selected from a strong field of candidates.”
Richards and Gai bring regulatory and academic firepower
Richards is a former senior prudential regulator and “internationally respected regulatory, risk, and compliance leader with experience across private industry, government, and not-for-profit sectors in the US, Australia and international policy-making organisations.”
The RBNZ says Richards has “a deep understanding of prudential regulation.”
Gai is Professor of macroeconomics and head of the departments of economics, accounting and finance, and property at the University of Auckland. He is described as “a leader in the fields of financial stability and monetary policy” who “has published extensively on macroprudential policy and systemic risk.” Gai served on the Board of the Financial Markets Authority from 2018 until his resignation on 31 December 2025.
Richards has been appointed for a four-year term from 1 January 2026 to 31 December 2029. Gai has been appointed for a three-year term from 1 January 2026 to 31 December 2028.
In addition to serving on the FPC, Gai will continue his service on the Monetary Policy Committee.
Who sits on the FPC – and what’s next
Alongside Richards and Gai, the other members of the FPC are Governor Anna Breman and RBNZ non‑executive board members Byron Pepper (who will chair the FPC), Grant Spencer, and Philip Vermeulen. Finlay will also serve on the FPC “by virtue of his position as RBNZ board chair.”
The RBNZ board has agreed a Charter for the FPC, “setting out the operational framework for the FPC to ensure its proper management and functioning.” The FPC Charter includes the committee’s terms of reference.
The first meeting of the FPC is scheduled for late February 2026.
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