Reserve Bank of New Zealand
| Headquarters | Wellington , New Zealand |
| founding | August 1, 1934 |
| president | Adrian Orr (Governor of the bank since March 2018) |
| country | New Zealand |
| currency | |
| ISO 4217 | NZD |
| Currency reserves | US $ 17.1 billion (2016) |
| Website | |
| List of central banks | |
The Reserve Bank of New Zealand is the central bank of the island nation of New Zealand . It is responsible for the issuance of the national currency , the investment and management of currency reserves and a stable money market policy . The bank is owned by the state, but is not part of a ministry . The Reserve Bank of New Zealand acts, represented by its own governor, autonomously and independently, but supports the government in economic and financial policy .
history
The bank celebrated its 75th anniversary on August 1, 2009, but its history began even before it was founded.
prehistory
Following the signing of the Waitangi Treaty in 1840, there was some uncertainty about the legal tender of the British colony of New Zealand. British gold and silver coins and the banknotes printed under English law by the Union Bank of Australia from 1840 onwards were intended to replace the foreign currency that had been in circulation until then. But the lack of money in circulation allowed foreign currencies to survive as a means of payment until the late 1840s.
In order to get the financial problems under control, new banks were founded, none of which saw the year 1861, when Governor Thomas Gore Browne passed two laws allowing the Bank of New Zealand and the Bank of New South Wales to be founded and these the right to print and allowed to issue banknotes. Three more banks with the same rights were to follow in 1864, 1873 and 1874. The 1861 gold rush in Otago gave the colony a remarkable economic boom and money was no longer a problem from then on.
All newly established banks were in private hands and the money issued was the private money of the banks. They used it to issue credit insurance on their banknotes. However, if a bank was in trouble or went bankrupt, the money it was spending also lost its value. But the public still had confidence in private money, as at that time parliament was dominated by trusted business people.
The Great Depression from 1873 to 1896 did not leave New Zealand unaffected. The following banking crisis in the early 1890s finally led to the Bank Note Issue Act in 1893 , which obliged banks to secure their money with the equivalent in gold and at the same time gave the government the option of declaring bank notes as legal tender.
At the end of the 1920s, the question of having its own central bank finally arose. The discussion was fueled by the effects of the Great Depression from 1929 to 1941 on the capital market and by the visit of Otto Niemeyer in 1930, who as a financial expert of the Bank of England recommended the establishment of a central bank in his Niemeyer Report New Zealand published in May 1931 .
founding
The Niemeyer Report was published in May 1931. That report recommended the creation of a central bank the size of New Zealand that would issue banknotes, control exchange rates and the stability of money, and set up reserves for business with commercial banks. Among other things, the central bank should be independent and free from political influence. But Prime Minister George William Forbes found no interest in the project and delayed the political debate over the introduction of a central bank.
There had to be a change in the post of finance minister, who then moved Forbes to implement Niemeyer's recommendation. Under the new Finance Minister Gordon Coates , the Reserve Bank Act 1933 created the legal basis for a central bank in New Zealand in November 1933 .
On August 1, 1934, the Reserve Bank of New Zealand began operations in Wellington under the direction of Bank Governor Leslie Lefeaux. The original ownership rights to the bank were peculiarly organized. Although the contract was a state bank that took over the gold holdings of the private banks to support the currency, the capital of the bank was procured by private investors and the commercial banks were obliged to make a defined minimum deposit in the central bank. In 1936, the Reserve Bank of New Zealand became 100% state-owned.
The state takeover, the price of taking over the gold and the exchange of private banknotes created abundant tensions between banks and within politics. But the outbreak of the Second World War in 1939 shifted the concentration of the banking business to another point and restricted the freedom of the banks. After the end of the war, the restrictions were lifted and with the economic boom, old conflicts were forgotten. The Reserve Bank of New Zealand Act 1989 gave the central bank additional autonomy and tools that could include: a. better fight inflation .
The Reserve Bank of New Zealand issued four series of banknotes. The first series was put on the money market quickly and provisionally in 1934 to replace the old private banknotes. The second series came in 1940 and remained until the changeover to the decimal system in 1967. The third series, which was converted to the New Zealand dollar , was then gradually replaced from 1992 by the fourth series, which is still valid today.
today
In addition to its unchanged task of operating an efficient and stable monetary market policy, the Reserve Bank of New Zealand now also controls the registration and the business policy of the commercial banks. In 2007 there were additional discussions about extending this control to insurance companies, construction companies and credit companies, but so far without any result.
The task of setting targets today includes keeping inflation in New Zealand between 1 and 3 percent on average. The amount of money in circulation plus daily sight deposits ( M1 ) that the bank controls today is reported at NZ $ 48.584 billion (January 2017) . M2 is NZ $ 150.882 billion (January 2017) and M3 is NZ $ 289.747 billion (January 2017) . Since cashless payments and card payments are very extensive in New Zealand , the Reserve Bank can afford to keep the circulation of banknotes and coins comparatively small at NZ $ 5.29 billion (January 2017) .
The bank employs around 240 people (2009) and also operates a small museum at its headquarters in Wellington.
Since 1981 the National Archives Archives New Zealand have kept the Waitangi Treaty well wrapped in the safe of the Reserve Bank of New Zealand.
literature
- Arthur Grimes, Gary Hawke, Frank Holmes, John Singleton: Innovation and Independence: The Reserve Bank of New Zealand, 1973–2002 . University of Auckland Press, Auckland 2006, ISBN 1-86940-364-9 (English).
- Robert John Familton: Banking - The Reserve Bank . In: Alexander Hare McLintock (Ed.): An Encyclopaedia of New Zealand . Wellington 1966 ( online [accessed December 17, 2015]).
- Tyler Cowen, The Reserve Bank of New Zealand - Policy Reforms and Institutional Structure , Reserve Bank of New Zealand, Wellington, September 1991.
- Ken Matthews, The legal history of money in New Zealand , Reserve Bank of New Zealand, Bulletin Vol. 66 no. March 1, 2003.
- Matthew Wright, The policy origins of the Reserve Bank of New Zealand , Reserve Bank of New Zealand, Bulletin Vol. 69 no. September 3, 2006.
- The History of the Reserve Bank of New Zealand , Reserve Bank of New Zealand, Wellington, July 2009.
Web links
Individual evidence
- ^ Adrian Orr . Reserve Bank of New Zealand , accessed January 19, 2016 .
- ^ New Zealand Foreign Exchange Reserves . tradingeconomics.com. Accessed on January 29, 2017 (English)
- ↑ a b Ken Matthews, The legal history of money in New Zealand , Reserve Bank of New Zealand, Bulletin Vol. 66 No. 1, March 2003, p45.
- ^ The Bank-Note Issue Act 1893 . (PDF 2.6 MB) The Knowledge Basket - Legislation NZ , accessed on January 19, 2016 .
- ^ Matthew Wright, The policy origins of the Reserve Bank of New Zealand , Reserve Bank of New Zealand, Bulletin Vol. 69 No. 3, September 2006, p5
- ^ A b Sydney James Butlin : Australia and New Zealand Bank. Longmans, London 1961, p. 402
- ^ What is the Reserve Bank? . Reserve Bank of New Zealand , accessed May 10, 2019 .
- ^ C1 Monetary aggregates (discontinued) . (XLS 286 kB) Reserve Bank of New Zealand , accessed May 10, 2019 .
- ^ Treaty of Waitangi - Te Tiriti o Waitangi Archives New Zealand, accessed July 17, 2009.