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RBNZ and trustees to cooperate over new rules

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, March 30 NZPA - The Reserve Bank and New Zealand's five corporate trustees have signed an agreement to cooperate over the introduction of new rules for non-bank deposit takers.

The central bank, trustees and the Trustee Corporations Association signed a memorandum of understanding today on the oversight of deposit takers, agreeing principles of coordination and cooperation between the Reserve Bank, as regulator, and the prudential supervisors.

"Everyone has learned a great deal from the global financial crisis. But it's one thing to change the law, and another thing to make it work in practice," trustee association chairman Clynton Hardy said.

The agreement covers the day to day relationship between the Reserve Bank and the trustees, including regular meetings, better information sharing, and a process for early warnings about deposit taker activity.

However, the arrangement is not intended to eliminate all risk for investors in non-bank institutions.

Changes to the Reserve Bank Act have tightened rules for non-banking deposit takers following numerous finance company failures and hefty losses for many investors.

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