DHBs have Ministerial authority to operate foreign currency bank accounts in New Zealand for making payments for goods, services and fixed assets to overseas suppliers to cover circumstances where: there is uncertainty over the exact date a currency will be required or there are delays in delivery of funds lower costs will be incurred than if negotiating overseas purchases in New Zealand dollars overseas suppliers will not accept payment in New Zealand dollars lower costs are incurred than if foreign exchange derivatives were rolled forward. DHBs are authorised regulation 8(1) to hold bank accounts at banks outside New Zealand if: the bank account comprises debt owed and payable in New Zealand dollars the credit of the bank satisfies the credit-rating test applied to registered banks and registered building societies the laws of the jurisdiction under which the bank operates the bank account do not discriminate between classes of unsecured creditors except upon grounds, and only to the extent, set out in a subordination covenant the central bank of the jurisdiction in which the bank operates the bank account is a shareholder in the Bank for International Settlements. Prior authority in writing from the Minister of Finance is required for any other bank accounts at banks outside New Zealand. Financial risk management Treasury Policy (See and .) Each DHB is expected to have a formal written Treasury Policy that is approved by the A DHB’s has a duty to ensure that the DHB operates in a financially responsible manner, including prudently managing assets and liabilities (): having a Board-approved Treasury Policy is one component of fulfilling this duty. The Treasury Policy should link to, but not replace, authorities and responsibilities in a DHB’s Minister approved Delegations Policy. As a minimum, the Treasury Policy should include policies to address key financial risks faced by the DHB, which are likely to vary according to DHB size. Key financial risks may include: liquidity and funding risk foreign exchange/currency risk (classified separately by capital and
DHBs have Ministerial authority to operate foreign currency bank accounts in New Zealand for making payments for goods, services and fixed assets to overseas suppliers to cover circumstances where: there is uncertainty over the exact date a currency will be required or there are delays in delivery of funds lower costs will be incurred than if negotiating overseas purchases in New Zealand dollars overseas suppliers will not accept payment in New Zealand dollars lower costs are incurred than if foreign exchange derivatives were rolled forward. DHBs are authorised regulation 8(1) to hold bank accounts at banks outside New Zealand if: the bank account comprises debt owed and payable in New Zealand dollars the credit of the bank satisfies the credit-rating test applied to registered banks and registered building societies the laws of the jurisdiction under which the bank operates the bank account do not discriminate between classes of unsecured creditors except upon grounds, and only to the extent, set out in a subordination covenant the central bank of the jurisdiction in which the bank operates the bank account is a shareholder in the Bank for International Settlements. Prior authority in writing from the Minister of Finance is required for any other bank accounts at banks outside New Zealand. Financial risk management Treasury Policy (See and .) Each DHB is expected to have a formal written Treasury Policy that is approved by the A DHB’s has a duty to ensure that the DHB operates in a financially responsible manner, including prudently managing assets and liabilities (): having a Board-approved Treasury Policy is one component of fulfilling this duty. The Treasury Policy should link to, but not replace, authorities and responsibilities in a DHB’s Minister approved Delegations Policy. As a minimum, the Treasury Policy should include policies to address key financial risks faced by the DHB, which are likely to vary according to DHB size. Key financial risks may include: liquidity and funding risk foreign exchange/currency risk (classified separately by capital and