Stage Two of the Reserve Bank Act Review

Thursday 3 October, 2019

Submissions for the second stage of the Reserve Bank Act review have now closed.  This stage of the review is a wide-ranging review of the Reserve Bank’s financial stability role and governance arrangements. One component of the review is the consideration of the Reserve Bank’s role in addressing the risks to New Zealand’s economy presented by climate change.  A key consideration is the physical risks related to the effects of climate change, such as rising sea levels affecting houses, and adverse weather events affecting agriculture and horticulture. These risks have implications for bank lending and insurance pricing and availability which will ultimately have an impact on local authorities.  Furthermore, there are risks associated with transitioning to a lower-carbon economy, which can affect asset values, incomes, and taxation levels, which has implications for local authorities and their ratepayers.

Tompkins Wake will be keeping a watching brief on developments.  In the meantime, the key message for local government is that the financial implications of risk management associated with climate change are being considered across central government institutions and this will ultimately be relevant to local government responses to climate change.