New Zealand Reserve Bank issues non-banking risk management standards

The New Zealand regulator introduces risk guidelines for building societies and credit unions

WELLINGTON, NZ - Risk management standards from the Reserve Bank of New Zealand offer regulatory guidelines for building societies, credit unions and other non-banking deposit taking companies.

The risk management programme guidelines specify that deposit-taking firms are required to put a risk management programme in place, identifying and monitoring credit, market, liquidity and operational risks.

"The development of these regulations is another positive step forward in implementing the new prudential regime for non-banks, which is aimed at improving the future resilience of New Zealand's non-bank financial sector," said Grant Spencer, deputy governor of the Reserve Bank."

The Reserve Bank, which acts as New Zealand's central bank, financial stability watchdog, prudential regulator and supervisor, says firms will need to assess their preparedness for stress events, business disruption, as well as clarify board and senior management responsibilities.

Its guidelines follow a draft consultation paper issued in June, which the Reserve Bank says encouraged generally supportive industry submissions. The Reserve Bank says the new requirements must now be implemented by September 1, 2009.

Click here to read the risk management programme guidelines.