directors and senior executives of banks. in giving consent, we recognised that, under certain circumstances, all our large banks being australian - owned could increase our system ’ s exposure to stress emanating from the australian economy and financial system. we will be considering this further and have let it be known that we will take further measures to manage this risk if necessary. as noted before, the conditions imposed on the anz ’ s acquisition are a specific application of our current policy thinking around governance and crisis management, coloured by the additional considerations introduced by the rbnz amendment act. this thinking is still developing, and relevant to all systemically important banks. generic policies regarding these matters will be fleshed out as part of our broader financial stability work programme, and we will be consulting with banks on those generic policies in due course.

national bank chief executive ’ s employment contract be between that person and the board of the national bank, and that any amendments to the national bank ’ s constitution have our consent. the intent of these measures is to ensure that there is coherence in the national bank ’ s local accountability arrangements and that the local board remains in a strong position to exercise independent and meaningful governance of the management of the national bank, in the best interests of the national bank, in good times and in bad. this requirement should be seen as a means of reinforcing our emphasis on the role of directors in overseeing a bank ’ s operations, and our ability to manage a crisis involving the failure of any large bank in new zealand. third, we require all prospective appointments of directors or senior executives to the anz or the national bank to be advised to us and the appointments made only if we have no objection. this measure ensures that the appointment process is in line with our new obligation introduced by the rbnz amendment act to have regard to the suitability for their positions of directors and senior managers of registered banks. generally speaking we would be unlikely to object to an appointment unless there were strong reasons to believe the individual would be unsuitable for a position of responsibility over a registered bank. finally, we require that each registered bank in the anz group maintain a level of capital in line with our current policy on capital adequacy for consolidated banking groups. this tightens up the capital adequacy rules a little in this case, to account for the fact that the anz group now contains two systemically important registered banks. we regard it as important that each of these banks maintain adequate capital on a solo basis. we took these steps in pursuit of our statutory obligations to promote the maintenance of a sound and efficient financial system in new zealand, and to avoid significant damage to the financial system that could result from the failure of a registered bank. we don ’ t think the conditions will make a great difference to the current day - to - day running of the national bank ’ s operations under normal circumstances. however, we do see them as important in bolstering our ability to deal with a crisis situation involving the bank or the anz group. we sought to impose the conditions in a manner consistent with our general approach to banking regulation, which is not to get into the business of managing banks, but to put the onus for effective bank management on the shoulders of those bestplaced to carry that task - the