NZRB to publicise regulatory breaches
THE Reserve Bank will be ‘‘naming and shaming’’ registered banks which breach regulatory requirements.
The move is an attempt to improve transparency and reporting disciplines, the central bank says.
Following consultation late last year, the Reserve Bank will publish material breaches of condition of registration and disclosures related to banks’ credit ratings on its website.
New Zealand Bankers’ Association (NZBA), which represents the 17 registered banks in New Zealand, said that it supported openness and transparency and was pleased the central bank had accepted that only actual material breaches be published.
NZBA chief executive Roger Beaumont said the members looked forward to discussing implementation of the policy with the Reserve Bank.
The new policy, which is expected to take effect from January 1, 2020, will require a bank to report promptly to the Reserve Bank when there is a breach or possible breach of a requirement in a material manner, and report all minor breaches every six months.
‘‘The policy aims to enhance market discipline by ensuring prompt breach reporting and publication, and by making it easier to find and compare information about banks’ compliance history,’’ Geoff Bascand, deputy governor and general manager financial stability, said.
‘‘It also encourages bank directors to focus on materially significant issues and the management of key risks rather than concern themselves with relatively minor issues.’’