TITLE: New Zealand Reserve Bank Opens Consultation on Prudential Levy for Financial Institutions BODY: On August 11, 2026, the Reserve Bank of New Zealand – Te Pūtea Matua (RBNZ) released a consultation document on the introduction of a prudential levy. The consultation is being undertaken on behalf of the Minister of Finance and was announced as part of the Government's Budget 2026. The levy represents a decision in principle to shift the cost of prudential regulation to the financial sector. The proposed levy would apply to banks, non-bank deposit takers, insurers, and financial market infrastructures. Section 296(1) of the RBNZ Act requires the Minister to ensure consultation with representatives of those liable to pay the levy or significantly affected by it before recommending regulations. The consultation covers three key areas: proposing full cost recovery under the levy for all prudential costs; the sectoral scope of the levy; and the method of calculating or ascertaining the amount of the levy paid by individual regulated entities. The levy aims to ensure that financial institutions bear the costs associated with prudential regulation rather than these costs being funded through general taxation. The consultation period runs for ten weeks, with submissions due by 5pm on October 16, 2026. Following the consultation period, final Cabinet decisions are expected in early 2027. Interested parties can submit responses via the Citizen Space consultation platform or through the Beehive.govt.nz portal. The RBNZ has indicated it looks forward to engaging with the industry on these proposals. REFERENCES: Reserve Bank of New Zealand – Te Pūtea Matua. "Consultation on a prudential levy opens." August 11, 2026. https://www.rbnz.govt.nz/news/2026/08/consultation-on-a-prudential-levy-opens

Consultation on a prudential levy opens - Reserve Bank of New Zealand - Te Pūtea Matua

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