Quarterly Statement by the Council of Financial Regulators – March 2023

The Council of Financial Regulators (CoFR) held its quarterly meeting on Thursday 9 March 2023. The meeting was chaired by Reserve Bank of New Zealand Governor Adrian Orr.

The Council discussed their role in responding to the recent severe weather events and work underway to deepen co-operation and co-ordination across CoFR agencies more broadly. They also discussed the Reserve Bank's work plan to explore a central bank digital currency (CBDC) and the Commerce Commission's work on retail payments system regulation.

The Council discussed the recent severe weather events - the Auckland floods and Cyclone Gabrielle - and the role of the financial system in responding to them. CoFR noted the importance of co-ordination, particularly when seeking information from the insurance sector given the number of claims being processed. CoFR welcomed the co-ordination arrangements already implemented at pace, and noted they were undergoing further development. CoFR agreed that the lessons learnt from this experience would assist co-ordination efforts around similar future events.

CoFR noted that the RBNZ was investigating a CBDC through a multi-year, multi-stage approach and no decision had yet been taken on whether or not to issue a CBDC. CoFR noted the RBNZ was currently defining a set of high-level design options to inform a high-level assessment of the potential costs and benefits. This assessment was expected to be completed by the end of 2023 and would be followed by a public consultation. CoFR noted critical domestic and international interconnections for this work including retail payments regulation, regulations impacting developments and innovations in financial technology, and work on digital identity and consumer data rights.

CoFR noted the Commerce Commission's new role in regulating the retail payment system under the Retail Payment System Act 2022, and the preliminary strategy and work programme being adopted. CoFR discussed the connections with other regulatory initiatives and agreed to explore a joint vision for the future of New Zealand's payment system.