Public disclosure of bank breaches

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Our policy work for bank oversight

Since 1 January 2021, all banks are required to report breaches of regulatory requirements privately to us, in accordance with a notice issued under Section 93 of the Reserve Bank Act. This page summarises the development of a new policy for reporting and publishing of regulatory breaches by banks.

Published:

March 2021

We published the reporting requirements in the Section 93 notices and associated guidance:

Guidance document providing further explanation and process arrangements for the Section 93 obligation

PDF | 780KB

The ‘Material breaches of key bank prudential requirements’ webpage lists any material breaches by registered banks.

Material breaches of key bank prudential requirements

Amendment orders

We had the following Amendment Orders made to the bank disclosure Orders in Council to introduce a materiality threshold to the disclosure of breaches of conditions of registration, starting from disclosure statements with a balance date of 31 March 2021:

Registered Bank Disclosure Statements (New Zealand Incorporated Registered Banks) Order 2014 Amendment Order 2021

Registered Bank Disclosure Statements (Overseas Incorporated Registered Banks) Order 2014 Amendment Order 2021

Below are the working copies of the disclosure Orders in Council incorporating these latest amendments.

New Zealand-incorporated registered banks

PDF | 1MB

Overseas-incorporated registered banks

PDF | 810KB

December 2020 — notices issued

We issued notices to all banks under Section 93 of the Reserve Bank of New Zealand Act 1989, requiring them to report breaches of regulatory requirements privately to us with effect 1 January 2021.

Example of the Section 93 notices issued to banks

PDF | 780KB

November 2020 — feedback on amending orders

We discussed with banks during Q4 2019 the detailed wording for the new formal requirement to report breaches, and associated guidance on the materiality threshold. The date for the policy to take effect was delayed a further six months due to COVID-19.

We welcomed any comments on the following drafts of the amending orders needed to revise the disclosure Orders in Council.

Draft amending order for New Zealand-incorporated registered bank disclosures

PDF | 420KB

Draft amending order for overseas-incorporated registered bank disclosures

PDF | 418KB

September 2019 — our response and decisions

We published a summary of submissions and final policy decisions on the reporting and publishing of breaches by banks.

Summary of submissions and policy decisions on proposed breach reporting and publication regime

PDF | 247KB

May 2019 — submissions published

We received three submissions on the consultation document 'Public and private reporting by banks of breaches of regulatory requirements, with consideration of materiality'.

New Zealand Bankers Association

PDF | 307KB

Banking Ombudsman

PDF | 272KB

Bank of Baroda

PDF | 492KB

October 2018 — initial consultation

We published a consultation paper proposing changes to the reporting and publishing of regulatory breaches by banks.

Public and private reporting by banks of breaches of regulatory requirements, with consideration of materiality

PDF | 878KB

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 us of any breaches of their conditions of registration

we should draw on that reporting to publish collated information on bank breaches on a dedicated page on our website.

The consultation paper sought views on the proposed approach for putting that conclusion into effect and on the option of applying a materiality threshold to the publication of breaches. The paper discussed the criteria that could be applied for testing materiality.

The consultation closed on 14 December 2018.