McNair Craig: Reserve Bank of New Zealand Amendment Bill — Second Reading 
McNair Craig: Reserve Bank of New Zealand Amendment Bill — Second Reading 
[Volume:610;Page:7606] 
CRAIG McNAIR (NZ First) 
: 
 As I speak to the Reserve Bank of New Zealand Amendment Bill I note the recommendations in the 2001 Independent Review of the Operation of Monetary Policy in New Zealand by Professor Lars Svensson regarding the management of the Reserve Bank. As mentioned earlier those recommendations were that the governor be removed from the position of chairperson of the board of directors and also that the deputy-governor be removed from the board. I note that the balance between the board’s independence and its access to the information necessary to enable effective monitoring can be best achieved by retaining the governor on the board. 
Another recommendation was to require the board’s chairperson to be a non-executive director. An independent chairperson is important to the maintenance of a credible and unbiased system of accountability for the bank and the governor. Another recommendation of note was to require the board to report annually on the performance of the bank and the governor. That it was said would raise the visibility of the board and strengthen the accountability of the bank. New Zealand First will support any legislation that promotes accountability. We believe in accountability in Government and in that respect this bill is no different. 
Subsequent to the introduction of this bill I sat on the Finance and Expenditure Committee and I am glad that a further amendment was proposed to the legislation. The effect of the bill is to widen the restriction on the use of the words “bank” “banker” and “banking” to ensure that non-registered banks do not use trademarks in a way that suggests that they are banks. I and the other members of the committee listened to a large number of submissions surrounding the proposed word restrictions. Non-bank financial services such as credit unions and building societies argued that it would damage their businesses as legally they can and do offer banking services including mortgages loans Eftpos cards Internet and phone banking cheques and credit services. 
It is understandable that Parliament might be concerned that suppliers of banking services that are not registered banks could be using those words indiscriminately and misrepresenting their status. However the legislation should not prevent such providers from effectively advertising their services. For New Zealand First to vote for this bill the recommendation that the bill recognise that the terms “bank” “banker” and “banking” described the services provided by a variety of non-registered financial services had to be taken on board and I am glad it was taken on board. I also note that a disclaimer is required when such a provider uses one of the terms in its advertising to ensure that the consumer is aware that the provider is not a registered bank. 
While we are on the subject of banks I want to acknowledge the incredible work done by credit unions in our economy and the specific services they provide. I was a member of a credit union for a long time and I felt it did a great job. I think we can see that we have had far more problems and complaints in respect of banks than we have ever had with credit unions or building societies. They do a great job in this country and in our economy. 
The question that needs to be asked is whether other amendments to this bill strengthen the powers of the Reserve Bank to register banks and supervise registered banks. Other amendments are to allow the Bank to consider extra information when registering banks; to improve the Bank’s powers to investigate and direct banks in financial difficulties or failing to meet disclosure requirements; to improve supervisors’ abilities to obtain information and to improve the Bank’s ability to deal with bank failure. They also update offence and penalty provisions. 
I close by saying that New Zealand First supports this bill. As always we support good legislation and oppose bad legislation. This is good legislation.