(7 March 2025 – New Zealand) Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr unexpectedly stepped down from the central bank with a remaining three years in his second five-year term.
Orr refused to concede on his strident demand for Australia’s Big Four banks to hold much higher capital buffers than international peers, likely a key factor in his shock resignation the AFR reports. The RBNZ is placing a greater emphasis on banking competition across a range of its policies and actions.
Australian lenders were required to hold enough capital in New Zealand subsidiaries including BNZ, ASB, ANZ NZ and Westpac NZ to protect against a one-in-200 year crisis – as necessary to protect his country because it does not have any major banks of its own. Orr was concerned that in the event of a financial crisis, Australian banks would withdraw from New Zealand.
Kiwibank has awarded a mandate to Macquarie Capital to find an asset capitalisation backer willing to inject NZ$500 million into the group to raise funds for future business growth ahead of an IPO of the government backed lender in the medium term. Kiwibank was launched in 2001 by the Labour government to compete with major Australian lenders.
“The Commerce Commission’s market study of the banking sector found that the sector was uncompetitive and New Zealanders are not well-served by a highly profitable, two-tier oligopoly” commented New Zealand Finance Minister Nicola Willis.