Regulatory Alerts2022-05-11
Reserve Bank of New Zealand Revised Outsourcing Policy Regulatory Impact Statement
The Reserve Bank of New Zealand issued this Regulatory Impact Statement to justify revisions to its outsourcing policy (BS11) for registered banks, aiming to mitigate market failures and ensure financial stability. The document details a review process that identified risks where outsourcing arrangements could frustrate bank resolution and disrupt services, leading to the selection of a revised policy option over maintaining the status quo or relying solely on legislative changes. Key requirements include mandatory separation plans for foreign-owned banks, specific contractual provisions, and robust backup arrangements to support the Outright Bank Resolution mechanism, with an estimated net societal benefit of $1.9 to $2.2 billion.
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