Public disclosure of bank breaches

Status: We have published the final policy decisions on reporting by banks on breaches of materiality and are undertaking further discussions with banks on implementing the policy.

23 September 2019

The Reserve Bank has published a summary of submissions and final policy decisions on the reporting and publishing of breaches by banks.

The decision follows a public consultation on the matter late last year, and ongoing discussion with stakeholders on a new framework for the reporting of banks’ breaches.

The new policy 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. Only actual material breaches will then be published on the Reserve Bank’s website.

Following further discussion with banks on implementation details the policy is planned to take effect from 1 January 2020.

20 May 2019

Submissions on the consultation document “Public and private reporting by banks of breaches of regulatory requirements, with consideration of materiality” closed on 14 December 2018. The following three submissions were received:

The Bank is currently assessing the consultation feedback and finalising its policy decisions (which will be published in the third quarter of 2019). Any new requirements are likely to apply from 1 October 2019 or 1 January 2020.

23 October 2018

The Reserve Bank has published a consultation paper proposing changes to the reporting and publishing of regulatory breaches by banks.

One of the conclusions of the Regulatory Stocktake, and the follow-on development of the Bank Financial Strength Dashboard, was that banks should be formally required to notify the Reserve Bank of any breaches of their conditions of registration, and that the Reserve Bank should draw on that reporting to publish collated information on bank breaches on a dedicated new page on its website.

The consultation paper seeks views on the proposed mechanism for putting that conclusion into effect.

The paper also seeks views on the option of applying a materiality threshold to the publication of breaches.

Under that option, the Reserve Bank would assess whether or not a breach that has been reported to it is material, and only material breaches would be published on the website. The paper discusses the criteria that could be applied for testing materiality.

If the consultation concludes that having a materiality threshold is the preferred option, changes would also need to be made to the Orders in Council that set out the requirements for banks’ disclosure statements.

The consultation closed at 5.00 pm on 14 December 2018.