31 August 1998

Reserve Bank completes review of disclosure requirements for registered banks

The Reserve Bank announced today the completion of a review of disclosure arrangements for registered banks. The Government gazetted these revised arrangements last Friday.

The Reserve Bank's disclosure regime for registered banks was introduced on 1 January 1996 and aims to promote financial system stability by providing depositors and other creditors with better information with which to assess the financial condition of a bank. The revised regime will take effect on 1 October 1998, and will apply to a registered bank's first disclosure statement occurring after that date.

Commenting on the new arrangements, Reserve Bank Deputy Governor Rod Carr said, "The changes are small refinements, which do not affect the broad structure of the disclosure regime. For instance, the revisions take into account the introduction of Internet banking. From October 1st, banks will be required to make Key Information Summaries available on their Internet sites, and each quarter direct banking centres will have to advise their customers of the Key Information Summary's availability." The Key Information Summary was developed principally to meet the needs of the prudent but non-expert investor, and provides a summary of a bank's financial position and risk profile.

The Reserve Bank review fine-tunes the disclosure arrangements based on the experience the Bank has gained over the last two years with the disclosure regime. It also aligns the Reserve Bank's disclosure arrangements with disclosure standards contained in FRS-33, the new accounting standard for financial institutions.

For further information please contact:

Peter Ledingham
Chief Manager
Banking System Department
Reserve Bank of New Zealand
Telephone (04) 471-3754