Latest news with #FinancialPolicyRemit
Scoop
14-05-2025
- Business
- Scoop
Examining Māori Access To Capital
The Reserve Bank of New Zealand – Te Pūtea Matua has published a Bulletin article which discusses the barriers Māori face in accessing capital that may be associated with market failures or imperfections. The Bulletin highlights barriers specific to Māori, including legislative constraints that make it challenging to use Māori land as loan collateral and low trust and awareness between Māori and banks. Māori are also more likely to live in rural areas and face market failures common to rural credit markets. The market failures that tend to be associated with these financing gaps are all forms of information failure or asymmetry. Assistant Governor Simone Robbers says that Māori face persistent barriers to accessing capital, many of which stem from market failures or imperfections. 'These barriers contribute to ongoing financial exclusion which has broader economic consequences. It can weaken the financial system's ability to allocate capital efficiently and limit the potential of the New Zealand economy, especially given the growing significance of the Māori economy,' says Ms Robbers. Various initiatives have been introduced to address information gaps and improve access to capital for Māori. These include better data collection, cultural training, and financial literacy programmes. Steps have also been taken to facilitate lending on Māori land and develop tailored bank products, though uptake remains low. Although the Māori economy has grown significantly and business financing gaps between Māori and non-Māori appear to be narrowing, further efforts are needed to completely close the gap and unlock the full potential of the Māori economy. Improved data collection, innovations in the financial system, AML/CFT reforms, and further legislative changes have been identified as ways that could ease barriers and support development in a way that recognises and promotes the cultural and economic significance of Māori. 'Identifying where market failures exist is important for informing targeted and effective public policy interventions that support more inclusive and efficient financial outcomes,' says Chief Economist Paul Conway. This research builds on the Reserve Bank's 2022 'Improving Māori Access to Capital' Issues Paper. It continues our commitment to exploring and addressing structural challenges in the financial system in line with our Financial Policy Remit and 2024 Letter of Expectations.
Mint
07-05-2025
- Business
- Mint
NZ's Willis Sought Meeting on Bank Capital Before Orr Quit RBNZ
(Bloomberg) -- New Zealand Finance Minister Nicola Willis sought a meeting with former Reserve Bank Governor Adrian Orr to discuss bank capital requirements in the weeks prior to his sudden resignation, documents released under the Official Information Act show. Willis also sought advice on her powers to direct the central bank on prudential policy, according to the documents released Wednesday in Wellington. Bloomberg requested all correspondence between Willis's office, the RBNZ and the Treasury Department in the month before Orr's departure on March 5. The emails and documents released add further fuel to suggestions that Orr resigned amid pressure from Willis for the bank to loosen bank capital requirements, which she has said are pushing up borrowing costs. Orr is yet to speak publicly about the reasons for his decision to leave less than half-way through his second five-year term. Since he left, the RBNZ has announced a review of the tougher bank capital rules that Orr championed. Willis requested a meeting with Orr on Feb. 7 'to discuss bank capital settings,' according to emails from her office dated Feb. 3. The RBNZ responded that Orr was on leave that day and was also 'involved with our forecast week preparations' ahead of the Feb. 19 Monetary Policy Statement. Willis's office then asked for a meeting on Feb. 5, which was rebuffed, before proposing Feb. 10. This prompted Orr himself to reply that it would be inappropriate for him to meet with the minister during a period in which he was chairing deliberations on monetary policy. 'The monetary policy week is sacrosanct to the Monetary Policy Committee's independence and deliberately so to protect the Minister — amongst other parties — and NZ's financial reputation,' Orr wrote in an email on Feb. 4. 'This makes meetings during this period difficult, unless urgent and necessary. Please understand I am here to assist but need to act appropriately.' Orr furthermore said bank capital was a 'wide and long running topic' and there were many in the RBNZ who could assist. 'I am fine to discuss post MPS, or via a written briefing, or via staff outside of the MPC if more urgent,' he said. Willis was undeterred, and continued to ask for a meeting 'this week or next' to discuss bank capital settings. Orr replied on Feb. 5, saying he 'won't be able to meet with the Minister to discuss bank capital issues until post the MPS deliberations' but noted he planned to see her on Feb. 17 or 18 for their regular discussions ahead of the rate decision. He said that the RBNZ board chair and deputy governor should attend any meeting on bank capital, and proposed Feb. 24, which was confirmed by Willis's office later that week. On Feb. 13, Treasury wrote to the minister's office regarding a question she had about using section 68B under RBNZ legislation. It said that section gave the government the power to direct the RBNZ on prudential policy, but was replaced by the Financial Policy Remit in 2021. 'Section 68B was rarely used in practice — referred to as 'nuclear option' — whereas the FPR is always in force, which normalizes having Government policy as a regard in prudential standards and strategic intentions set by the RBNZ,' Treasury said in an email that was partly redacted. Further documents show the RBNZ's five-year funding agreement was also a topic of interest for Willis during February. Willis later announced a less funding for the bank than it had sought from the government. Not all of the documents requested were released to Bloomberg, and there was no disclosure of what was discussed at the Feb. 24 meeting. Nine days later, Orr resigned. More stories like this are available on
