bank to maintain its credibility and relevance, we must change too. 1 orr, a. ( 2019 ), in service to society : new zealand ’ s revised monetary framework and the imperative for institutional change. https : / / www. rbnz. govt. nz / research - andpublications / speeches / 2019 / speech2019 - 03 - 29 2 irwin, n., of kiwis and currencies : how a 2 % inflation target became global economic gospel, new york times, dec. 19, 2014. 3 mcdermott, j. and r. williams ( 2018 ), inflation targeting in new zealand : an experience in evolution. https : / / www. rbnz. govt. nz / research - and - publications / speeches / 2018 / speech2018 - 04 - 12. 4 see also jacob, p. and a. wadsworth ( 2018 ). ref # 8058027 v1. 4 figure 1 : inflation, and gdp growth across monetary policy frameworks5 wellbeing of our people inflation has been low and stable in new zealand for nearly 30 years. there is a greater appreciation that low inflation is a means to an end, and not the end itself. in the fight to lower inflation that was perhaps easy to forget. the end goal is, of course, improving the wellbeing of our people. 6 for many in the general public, employment is one tangible measure of wellbeing. employment can provide an opportunity to earn your own wage, contribute to society, and live a fulfilling life. it is in this light that the reserve bank act ( 1989 ) has been amended to include a dual mandate with an employment objective alongside our price stability goal. incorporating the objective of supporting maximum sustainable employment, and equally weighting it alongside inflation, emphasises our long - term goal of improving new zealanders ’ wellbeing. this aligns us with the needs of the public. and it helps us renew our social licence to operate — the first building block for maintaining our credibility. but it is not enough for the public to believe in and understand our objectives. we must also prove to them that they can be achieved. this brings us to the second building block necessary for maintaining credibility : establishing modern governance principles for dealing with modern problems, and translating good governance into good decisions. good governance in preparing for our dual mandate, and a formal monetary policy committee ( mpc ), we have updated the principles and processes that form

utilities ” and to monitor the compliance of those systems. the european equivalent to dodd - frank is the european market infrastructure regulation ( emir ), which sets rules for central counterparties and trade repositories. other countries that introduced or plan to introduce strengthened regimes include the uk, canada and hong kong. a common feature of these regulatory regimes is their risk - based approach. regulators focus their oversight activity on the largest systemic risks to financial stability. typically this involves classifying certain fmis as systemically important and paying particular attention to those systems. so far these requirements only apply to otc interest rate derivatives. formerly the committee on payment and settlement systems ( cpss ). http : / / www. bis. org / cpmi / publ / d101. htm. bis central bankers ’ speeches the reserve bank ’ s oversight role in the international context, the reserve bank ’ s regulatory framework in the payments area is at the non - intrusive end of the spectrum. the bank and fma have a relatively low level of regulatory authority in this area. under the bank - fma designation regime 6, fmis seeking designation must have their rules approved by the bank and fma. however, this regime is voluntary and, for fmis not choosing to be designated, the bank must rely on suasion and industry engagement to promote its stability and efficiency objectives. in promoting the soundness and efficiency of the financial system, and consistent with the internationally agreed principles for fmis, the bank has four core objectives that fmis are encouraged to follow as responsible “ nz inc. payments citizens ” : • the first is good governance. it is important that fmis are well managed by appropriately skilled people. governance arrangements should ensure that the views of all relevant stakeholders are considered. • the second is a sound risk management framework, covering legal, credit, liquidity, operational and other risks. • the third is continuity of service. given their role at the heart of the financial system, it is important that fmis operate continuously. this means that a system should be able to cope with potential disruptions like technical problems and the failure of a participant. • the fourth is fair and open access. fmis should have risk - based and publicly disclosed criteria for participation that promote fair and open access with no unwarranted barriers to entry. fair and open access should encourage competition between participants and innovation. the bank promotes these objectives through consultation with the industry and we especially value the relationship