FX.co ★ RBNZ to Create Financial Policy Committee

The Reserve Bank of New Zealand (RBNZ) announced on Tuesday that it plans to establish a new Financial Policy Committee. This committee will be empowered to set prudential requirements for banks and play a pivotal role in decisions regarding mortgage lending ratios. This initiative is in line with recommendations from a recent parliamentary inquiry focused on banking competition and aims to enhance the central bank’s approach to financial policy-making, according to a statement from the RBNZ. The committee will include the RBNZ chair, its governor, three additional board members, and up to two individuals who are neither board members nor employees of the bank. It is slated to become operational by early 2026. In August, the RBNZ suggested reducing the capital requirements for lenders following criticism that the current rules were limiting the availability of funds in the economy and raising costs for borrowers.