Following its neighbors’ wide-ranging investigation into misconduct in the financial sector, a reform process has also begun in New Zealand. Adrian Orr, governor of the Reserve Bank of New Zealand (RBNZ) said that regulatory change over the past year had been “extreme”—not only in New Zealand, but globally.1 For the RBNZ, the focus of change will be on the three pillars of personal, market, and regulatory discipline.2
Culture and conduct risk considerations are a relatively new focus area for RBNZ. According to Orr, “We have an enormous amount of work ahead of us, and the Reserve Bank Act itself has been under review. It’s better to first understand what the role of the Reserve Bank is, and we need to be thinking much harder around how we go about regulation.”3 Geoff Bascand, RBNZ Deputy Governor, warns banks and insurance companies that they should expect the central bank to become more “intrusive” since it “cannot rely solely on self-discipline” driven by the industry itself.4
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