Regulatory Alerts2021-08-01
Memorandum of Understanding on Macroprudential Policy and Operating Guidelines
The Minister of Finance and the Governor of the Reserve Bank of New Zealand issued this memorandum to define the objectives and operating guidelines for macroprudential policy aimed at maintaining a sound and efficient financial system. The document establishes a framework for using specific instruments, such as countercyclical capital buffers and loan-to-value restrictions, to manage systemic risks arising from credit cycles and liquidity conditions. It mandates consultation with the Minister and Treasury before deploying these tools and requires the Reserve Bank to report on the effectiveness of its decisions in its Financial Stability Report.
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