New committee to oversee financial stability decisi
The Reserve Bank (RBNZ) has announced the creation of a financial policy committee (FPC) to strengthen decision-making on financial stability and prudential regulation.
The FPC will be responsible for key policy settings that affect the stability of New Zealand’s financial system, including macro-prudential tools such as debt-to-income (DTI) and loan-to-value (LVR) ratios for lending. It will also set prudential requirements for financial institutions regulated by RBNZ.
According to RBNZ, the new committee is designed to ensure greater focus, expertise, and accountability in financial policy.
Strengthening the Reserve Bank’s policy-making framework
The committee will comprise the RBNZ board chair, the governor, three other board members, and up to two external experts who are not RBNZ staff or board members.
RBNZ board deputy chair Rodger Finlay (pictured left) said the change would bring more specialised input to the bank’s financial policy processes.
“The creation of the FPC will strengthen financial policy making at the RBNZ, with greater focus and expertise brought to bear to make sure that the New Zealand financial system remains strong and stable,” Finlay said in a media release.
Finlay added that the decision followed engagement with the Treasury and the minister of Finance on ways to enhance financial policy oversight.
“A committee with formal policy decision-making authority from the RBNZ board and credible external experts was seen to achieve this outcome,” he said.
Part of a wider transformation at the Reserve Bank
The announcement comes as RBNZ undertakes significant organisational changes following the release of its 2025 Annual Report, which outlined a year of capability-building and structural reform.
Finlay said the past year had seen major progress toward the bank’s long-term goals.
“The Reserve Bank continued to support the New Zealand economy in navigating challenging economic conditions… including consumer price inflation falling back to within the monetary policy committee’s target band of 1 to 3 percent,” he said.
The Annual Report also highlighted key initiatives such as the implementation of the Deposit Takers Act 2023, launch of the Depositor Compensation Scheme, and a review of regulatory capital settings for deposit takers.
RBNZ Governor Christian Hawkesby (pictured right) noted the bank is now operating under a redesigned structure.
“We are in the process of implementing a new organisational structure, making us fit for purpose and able to sustainably deliver on our mandates within our new operating environment,” Hawkesby said.
External experts invited to apply
RBNZ will soon open applications for two external FPC member positions, with candidates expected to have strong expertise in financial stability and macro-prudential policy.
“Service on the FPC is a great opportunity to be at the heart of financial policy making,” Finlay said. “We look forward to receiving applications from experts who can give us independent perspectives and constructively challenge policy proposals.”
In line with government recommendations
The creation of FPC aligns with recommendations from the Finance and Expenditure Committee’s Inquiry into Banking Competition, which called for greater transparency and independent oversight of the RBNZ’s financial policy decisions.
FPC’s decisions will be subject to oversight by the full RBNZ board, and the committee is expected to become operational from early 2026.
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