The Reserve Bank of New Zealand is to beef up its regulatory enforcement of the banking and insurance sectors with a new compliance unit.
The new arm will look "to promote confidence in compliance across regulated sectors".
The central bank is already the prudential regulator of banks and insurers, but the new division will operate as a standalone unit.
RBNZ deputy governor Geoff Bascand said the central bank has "compliance goals of incentivising and managing prudent behaviour and holding institutions to account for non-compliance".
“The enforcement department will support the bank’s more intensive supervisory and enforcement approach and help the bank promote a sound and efficient financial system built on integrity, innovation and inclusion,” he added.
“The bank plays an important role in ensuring financial institutions remain sound and operate with appropriate conduct and culture, and we have a low-risk appetite for events that materially damage the financial system."
The new division of the RBNZ will have an enforcement committee to look at serious regulatory breaches.
Ben Carruthers, formerly of the Australian Prudential Regulation Authority, will run the department.
Bascand said RBNZ's objective "is to transform into a flexible and proactive regulator, with leading-edge tools and technology, and the capability to use these to fully enable our evolving responsibilities, legislative powers, and expectations”.
The RBNZ’s new team will work closely with other financial regulators including the Financial Markets Authority and the Commerce Commission.
