The New Zealand Treasury Department missed out on getting a say in how the Reserve Bank of New Zealand will roll out its new macro-prudential tools, to take the steam out of potential asset bubbles. It pushed for at least a passive role, according to documents published on the department's website.Treasury wanted an ongoing role in the use of the macro-prudential tools because, it argued, the Crown could be at risk of any "large externalities arising from [a] failure to mitigate system risk."It also argued that any future tools could involve taxes or other regulatory levers, Treasury officials Renee Philip and Vinny Nagaraj said in a draft background paper written in July last year.The officials said some ministers had expressed concerns about how the tools would be used, and what checks and balances the government would have available to it, the report said. While not wanting to impose on the Reserve Bank's turf, the officials recommended a policy agreement between the central bank governor and Minister of Finance, to make a direct line of accountability.The advice was ultimately ignored, with Finance Minister Bill English siding with the Reserve Bank's preference for signing a memorandum of understanding between the governor and minister. This allows the central bank to make policy decisions independently, though it will keep government and Treasury abreast of what's going on.reprinted from Business Desk