BRIEF-Reserve Bank Of New Zealand Undertakes Review Of Banks’ Compliance With Liquidity Policy, Identifying System, Controls And Risk Management Weaknesses

Reserve Bank of New Zealand: * UNDERTAKEN REVIEW OF BANKS’ COMPLIANCE WITH LIQUIDITY POLICY, IDENTIFYING SYSTEM, CONTROLS AND RISK MANAGEMENT WEAKNESSES

* COMPLIANCE WITH THE POLICY VARIED AMONGST BANKS, BUT WAS UNRELATED TO BANK SIZE * REVIEW COVERED ALL 15 LOCALLY INCORPORATED BANKS AND ONSITE INTERVIEWS WITH THE LARGEST TEN

* IT WAS POSITIVE WE FOUND BANKS ARE CURRENTLY MAINTAINING LIQUIDITY RATIO LEVELS ABOVE THE REGULATORY MINIMUMS * SOMETIMES LIQUIDITY POSITIONS WERE MORE FAVOURABLY REPORTED BY BANKS THAN COULD BE JUSTIFIED

* AREAS OF NON-COMPLIANCE HIGHLIGHTED GAPS IN THESE FRAMEWORKS, SUGGESTING WIDESPREAD UNDERINVESTMENT IN SYSTEMS AND ASSURANCE PROCESSES * PLAN TO COMMENCE A REVIEW OF THE LIQUIDITY POLICY IN THE FIRST HALF OF 2022 Further company coverage: