Financial stability creates a foundation for New Zealand’s economic success, Mr McGregor said.
“Financial stability is about ensuring financial institutions can keep supporting households, businesses and the wider economy through both normal times and periods of stress. When the system is stable, New Zealanders can save, borrow, invest, insure against risk, and make long-term decisions with confidence,” he said.
When it comes to the Reserve Bank’s prudential regulation approach, Mr McGregor underscored the importance of building and maintaining a fit-for-purpose regulatory regime, and taking a forward-looking and system-wide approach to enabling financial stability.
“A fit-for-purpose regime means regulation and supervision that are proportionate, risk-based, evidence-informed and future-proofed. It also means being disciplined about minimising unnecessary burden on firms and on the system, while remaining clear about the outcomes we need to achieve for financial stability,” he explained.
Mr McGregor noted that the Reserve Bank is continuing to strengthen its forward-looking and system-wide approach to ensure regulation remains relevant in a changing world.
He cited the implementation of the Deposit Takers Act and the review of the Insurance (Prudential Supervision) Act as examples. These highlight the Reserve Bank’s commitment to building more risk-based and future-focused regulatory frameworks that enable a resilient financial sector for New Zealanders.
Mr McGregor also acknowledged the importance of constructive relationships while maintaining the Reserve Bank’s role as a credible and effective supervisor.
“Strong relationships help us do that job better. They allow issues to be raised earlier, risks to be better understood and openly discussed, and supervisory action, where needed, to be better targeted and more effective.”
“Ultimately, our shared goal is a financial system that is resilient, competitive, innovative, and trusted by New Zealanders. Working together is critical to achieving that goal,” he concluded.
