, the international standards since basel i have been applied to all banks. in this sense, we have a single rulebook for the eu that is designed to guarantee a level playing field. that ’ s one side – the bright side – of the coin. on the flip side – the tarnished side, so to speak – this unity has come at much too a high cost to smaller and medium - sized institutions ever since basel ii. the basel iii reforms have made it even harder for these banks, as the rules are getting more and more complicated and explicit, and the list just keeps getting longer. this is increasing the 1 / 5 bis central bankers'speeches compliance workload – that is, the effort associated with meeting the requirements as well as demonstrating that they have been met. in fact, these rules are well suited to the lion ’ s share of increasingly complicated banking business – but the reality is that not all banks and savings banks have as complex a set - up as is assumed under the new framework. after almost a decade of regulatory reform, the international community of banking supervisors has been asking itself a number of questions for some time now. in which areas are reforms counterproductive? where are they disproportionate? to come to the point straight away, we can only answer these questions if we start by looking at the excessive strain placed on smaller and less complex institutions. 3. opportunities and obstacles : reduce operational burden, retain minimum capital and liquidity requirements what, then, do the burdens faced by smaller and medium - sized institutions look like? there is one point i would like to make quite clear. the problem is not so much capital or liquidity requirements but rather the high operational burden as a result of implementing these regulations and complying with them. this burden is considerable for all institutions, regardless of their size. however, small institutions, owing to their smaller staff sizes, are far less able to spread the costs of compliance across their employees and have to either hire additional staff or enlist external help. this tends to lead to proportionally higher burdens. the diagnosis is therefore clear : small and medium - sized institutions are, to a certain extent, groaning under the weight of increasingly complex regulation, which often goes above and beyond the level of complexity seen in their business models. but what is the right course of action? before we administer any form of medication, i would like to outline three principles that need to govern treatment. first, financial stability must remain our primary

adrian orr : opening statement to the finance and expenditure committee opening statement by mr adrian orr, governor of the reserve bank of new zealand, to the finance and expenditure committee ( fec ), wellington, 7 february 2024. * * * tn koutou katoa, and thank you chair. when i spoke to this committee following the release of our november monetary policy statement, i explained why the monetary policy committee had agreed to maintain the official cash rate ( ocr ) at 5. 50 %. in short, consumer price inflation at 4. 7 % remains too high, and we remain wary of ongoing domestic inflation pressures. the ocr remains at a restrictive level to slow spending growth in the economy and reduce inflation pressures. the monetary policy committee will be giving its full assessment of the latest economic data at our february monetary policy statement, due out at the end of this month. it is worth noting that this will be the first reflecting our new remit. you've just heard from the bank regarding our november financial stability report. i won't repeat what has already been covered, but i would like to note some other financial stability highlights from the past year. in december we completed our outsourcing policy. this ensures major new zealand banks can continue to operate if their parent bank fails. our review of our insurance legislation continues, and we have published a new interim solvency standard. the new deposit takers act, as mentioned by our chair, will strengthen and simplify our approach to the regulation of banks and other deposit takers, and introduce the depositor compensation scheme. we are well advanced in building the capacity, capability, and resilience needed to support the new legislative expectations. the recent variation to our five - year funding agreement was triggered primarily by the deposit takers bill becoming legislation, as well as progress in some multi - year investment programmes. the likelihood of the variation was signalled at the outset of our current funding agreement. we are progressing investment in the bank's critical infrastructure, including cyber and physical resilience, cash management, investigating a central bank digital currency, enhanced data collection, and more intensive regulatory supervision given our expanded mandate. as a full - service central bank, we work continuously on being cost - effective and fit for purpose. our international comparators highlight we are on course. we work closely with our council of financial regulators partners. we have achieved significant progress on the regime for financial market infrastructures, cyber resilience, and