New Zealand plans to introduce a deposit insurance scheme and expand the central bank's remit to monitor lenders and hold their directors and executives more accountable for misdeeds as part of the second phase of its review of the Reserve Bank Act.

The government will provide deposit insurance of NZ$50,000 per financial institution, a move that would ensure full cover for over 90% of depositors, the country's finance minister, Grant Robertson, said Dec. 18. The scheme will part of the new Deposit Takers Act aimed at revamping the Reserve Bank of New Zealand's regulatory powers.

New Zealand's Cabinet plans to make a final decision on the proposed law and the deposit insurance scheme in mid-2020 following further consultation.

In addition to the Deposit Takers Act, the government will introduce an Institutional Act for the governance and operations of the central bank.

Meanwhile, the central bank would be given additional powers, including authorizing it to undertake onsite inspections of banks. A governance board to oversee financial stability and new central bank transparency measures are also planned, Robertson said.

He said the proposed changes are based on the lessons learned in Australia following failures in that country's financial system.

In a same-day statement, New Zealand central bank Governor Adrian Orr said the proposed changes would be an important step toward modernizing the country's financial stability framework and the central bank's governance.

As of Dec. 17, US$1 was equivalent to NZ$1.52.