unclassified towards good governance in the financial system of aotearoa a speech delivered online to the institute of directors on 7 september 2023 by christian hawkesby, deputy governor and general manager financial stability written with esther bonaparte ref # 20585968 v1. 0 unclassified introduction e nga mana, e nga reo. e nga karanga maha o te wa. tihei mauri ora! ( to all authorities, all voices, to the many chiefs gathered here. behold the breath of life! ) e nga rangatira karanga mai mihi mai whakatau mai tena koutou katoa ( thank you to the leadership of the institute of directors who have called us here ; who have welcomed us here ; who have looked after us here. thank you very much ) i am delighted to be with you this morning, both as deputy governor of the reserve bank of new zealand and as a fellow member of the institute of directors. in recent years, i have presented to the institute of directors a number of times, at the annual conference and at branch functions around the country. some of the topics i ’ ve covered have been the maori economy 1, financial inclusion 2 and the future of money. all of these issues are at the heart of central banking in new zealand. they are also topics that i ’ ve found directors and trustees are very keen to understand for their roles. today i am here to discuss a topic at the very heart of the governance and the territory of the institute of directors – the path towards good governance in the financial sector of aotearoa. • • • first, i want to explain the role of governance in reserve bank ’ s approach to prudential supervision and regulation ; second, i want to look back through history to reflect on past governance lessons learned, and discuss how these have shaped governance guidance ; and finally, i will share the outcomes of our recent thematic review on governance and take any questions. i should first acknowledge that at the reserve bank, te putea matua we have been undergoing our own very significant changes in governance. under our 1989 act, the powers and responsibilities of the reserve bank were held by the governor, with the board playing an oversight and advisory role. now under our new 2021 act, the monetary policy committee is responsible for formulating monetary policy and the reserve bank board is responsible for all other governance functions. under this new approach, our board of directors looks much

to implementing reforms related to the eu acquis communautaire. it requires progress in the economic, legal and political domains. twinning projects help achieve exactly that : they assist in building a more democratic and open economy in ukraine. and they are always a two - way street : in these projects, institutions exchange, rather than transfer knowledge, thus broadening the perspective of everyone involved. the same applies to this twinning project for the nbu as well. it is a knowledge - sharing mission that will contribute to ukraine in fulfilling its european aspirations. 1 / 2 bis central bankers'speeches ladies and gentlemen, to paraphrase president reagan, the nbu is a shining city upon a hill whose beacon light guides freedom loving people in ukraine. and i am far from exaggerating. its achievements, professionalism as well as commitment as an independent and transparent central bank, delivering price and financial stability, cannot be overstated. its collaboration with international financial institutions, including the international monetary fund ( imf ), has helped ukraine remain on the path towards a more stable and prosperous future. from reforming the banking sector to undergoing a fundamental internal transformation, the nbu has skilfully navigated through often turbulent waters, gaining credibility in the eyes of partners and observers around the world. therefore, the prestigious central banking transparency award, granted to the nbu in 2019, was indeed well - deserved. the nbu ’ s culture, values and openness, its responsibility and clear communication has helped it achieve a hard - won trust with stakeholders and the general public. today, the nbu continues to establish itself within the international central banking community. i congratulate the nbu for recently becoming a member of the sustainable banking network as well as the network for greening the financial system. it displays the nbu ’ s commitment to building a more sustainable and greener financial system. i can therefore candidly say on behalf of the bank of lithuania that it is an honour and a privilege for us to work with the nbu in this project. i am confident that the twinning project will represent a qualitatively new stage in cooperation between our central banks, bringing about concrete results in the areas that it covers. ladies and gentlemen, i would also like to extend my appreciation to the colleagues leading the project from the narodowy bank polski ( nbp ) – an institution at the very top of the league of central banks. thanks to them the bank