Reserve Bank of New Zealand publishes thematic review calling for stronger risk management across deposit takers

The Reserve Bank of New Zealand has published a thematic review of risk management at deposit takers, finding practices are broadly proportionate to firms’ size and complexity but that capability needs further uplift to meet supervisory expectations. All deposit takers are expected to consider the report’s findings and recommendations and take appropriate action, and the central bank will follow up as part of ongoing supervisory monitoring. The review covered nine deposit takers with varied sizes and business models and assessed three pillars of sound risk management: the Risk Management Framework, governance and oversight, and the risk management function. It highlights the need for forward-looking and adaptive practices underpinned by strong governance and risk culture, and its insights will inform upcoming guidance supporting the risk management standard under the Deposit Takers Act 2023. The next thematic review will focus on risk management in the general insurance sector.