In return, we have a close, reciprocal interest in the parents of the overseas-owned banks in New Zealand, and in the supervision of those banks by the relevant overseas authorities. With New Zealand’s banks almost entirely foreign-owned, there is at least as large a probability that shocks to the New Zealand banking system will originate from abroad as from within New Zealand.
RBNZ supervision for promoting banking soundness The Reserve Bank of New Zealand, as the New Zealand banking supervisor, conducts its supervision of New Zealand banks that are overseas-owned within this internationally-agreed framework. (In New Zealand, unlike in Australia, the central bank is also the bank supervisor.)