##d. in partnership with the treasury, we continue to assess how we can effectively and efficiently operate monetary policy should interest rates reach zero. you will hear more about this in weeks to come, but business will continue as usual. the next leg of the reserve bank ’ s legislative review is also well advanced – refreshing our broad mandate and our institutional governance arrangements. the government ’ s recent decisions on the bank ’ s future governance arrangements involves a more legally empowered board that is responsible for all of the bank ’ s functions other than those undertaken by the monetary policy committee. 9 the bank will also have a broader financial stability mandate, better clarifying our regulatory purposes and powers, and financial crisis management processes. these are positive changes and we are preparing for the new regime. however, there are still significant details and important decisions to be made. a final round of public consultation will occur soon, as we look to establish key aspects of our regulatory perimeter, crisis management, and enforcement tools. 10 i encourage your interest as we need your insight and support. rbnz media release - https : / / www. rbnz. govt. nz / news / 2019 / 12 / reserve - bank - welcomes - governmentdecision - on - banks - future - objectives phase 2 review - https : / / treasury. govt. nz / news - and - events / reviews - consultation / reviewing - reserve - bankact of special interest to me, as a ceo, is that there is appropriate arrangements between governance and management. we are currently working on a framework that includes : clarity of purpose, a bank - wide ‘ risk appetite statement ’, agreed strategies, appropriate delegations, and measurable goals that will enable a smooth transition. futureproofing our ‘ sap ’ – the cash we are the sole provider of new zealand banknotes and coins, as well as overseeing all, and operating some, of the countries payment and settlement systems. 11 these roles are increasingly challenging as the dynamics of cash use change, payment systems technology evolves, and our physical equipment ( including vaults ) depreciate and need upgrading. we are obliged to consider and embrace innovative solutions to ensure that all new zealanders ’ currency and transactional needs are met in an efficient and secure manner. and, we want to ensure these innovations retain and promote financial inclusion. work is underway to address these challenges with our ‘ future of cash ’ programme – te moni anamata – to make sure that new zealanders, the financial system, and

the reserve bank are ready and resilient to changing uses and demands for cash. 12 our work to date has led us to expect a ‘ less cash ’ not ‘ cashless ’ society evolving rapidly. why not cashless? there are many reasons, in particular cash plays a critical role in ensuring financial inclusion and enabling business continuity. we have heard loud and clear that the public insist on cash remaining as a payments option, even though the economics are evolving. over coming months we need to make decisions on our safe keeping and distribution of cash. this will require legislative and industry collaboration to support the wider public good. another important milestone will soon be reached. this is a full replacement of our payment and settlement systems. this is the sharp end of a multiyear project that looks to renew new zealand ’ s inter - bank settlement system and central securities depository. 13 reserve bank – what we do - https : / / www. rbnz. govt. nz / about - us / what - we - do reserve bank future of cash - https : / / www. rbnz. govt. nz / notes - and - coins / future - of - cash reserve bank payments system replacement - https : / / www. rbnz. govt. nz / markets - andpayments / payments - system - replacement the reserve bank has both an oversight and operational role in the payment system in new zealand. the operational activities of the payment system include the provision of currency and a range of payment and settlement services. the bank also has an important role to play in supporting the financial sector ’ s cyber resilience. cyber - attacks globally are rapidly evolving and highly contagious. our role as the central bank means we can promote and enable the sharing of financial industry information and coordinate responses to improve system resilience. our work ahead in the near - term is to embed industry guidelines, standards, and practices in the financial sector so we can best work together in the interests of all new zealanders. raising industry standards – growing our ‘ branches ’ the branches of te putea matua are the regulated financial institutions that have chosen to do business in new zealand, and have been registered consistent with our rules and expectations. 14 this includes 26 registered banks and more than a hundred insurers and non - bank deposit takers. to sustain new zealand ’ s financial stability, it is important that people – customers, service providers and regulators – are able and willing to identify, price, alloca