Wellington, July 20 NZPA - The Government has increased the Reserve Bank of New Zealand's funding over the next five years in an agreement ratified today, reflecting the central bank's extra responsibilities.
The Reserve Bank's funding agreement expired at the end of June 2010, with $46.9 million in operating expenditure for the final year.
The new funding agreement saw operating expenditure increase to $47.8m in 2010-11, and to $56.4m by 2014-15.
Unlike other government agencies, the Reserve Bank's operations are funded from investment income under a five-year agreement between the Minister of Finance and the Governor, reflecting the bank's independence.
The increase in expenditure reflected additional responsibilities given to the bank by Parliament, as well as the early stages of an upgrade to New Zealand's bank notes, and the establishment of an office in Auckland.
"The Bank has been given responsibility for the prudential regulation of non-bank deposit takers, and, if legislation passes, will shortly take on responsibility for prudential oversight of insurers," bank governor Alan Bollard said.
The Reserve Bank was also playing a new role in countering money laundering and terrorism financing.
The bank was required to demonstrate value for money and tight control of underlying costs, he said.
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