The International Monetary Fund (IMF) is to assess New Zealand's banking and insurance sector to see how regulators compare with international standards, the Reserve Bank of New Zealand said Wednesday.

A report in the Reserve Bank Bulletin said the IMF's Financial Sector Assessment Programme (FSAP) for New Zealand would start later this year.

The IMF would examine how the Reserve Bank regulated and supervised financial institutions, and how the Financial Markets Authority regulated capital markets and financial market conduct.

An IMF team would visit New Zealand first in August and again in November to meet and question New Zealand authorities and hold discussions with industry groups and financial sector entities that were subject to regulation.

The IMF last conducted an FSAP review on New Zealand in 2004, when it found New Zealand's securities regulation performed relatively poorly, raising questions about the regulator's (the then Securities Commission) core capability and effectiveness.

It resulted in a number of recommendations for change to improve New Zealand's securities regulatory regime.

The Bulletin report said it was crucial that the various functions of the financial system -- such as the allocation of funds from savers to borrowers, facilitating an efficient means of transacting, and mitigating economic risk -- were equally supported by a robust regulatory framework that was appropriate for New Zealand conditions.

New Zealand authorities will consider and respond to the results of the FSAP to help ensure that the current regulatory framework is making the best possible contribution to New Zealand's economic welfare.

Recommendations and findings from the FSAP would be published in early 2017.

Source: XINHUA