TODAY |

ANZ censured by Reserve Bank for failing to have enough money on hand to cover risks

ANZ Bank has been censured by the Reserve Bank for failing to have enough money on hand to cover risks or losses – and for failing to disclose that for more than four years.

"ANZ’s directors have attested to compliance despite the approved model not being used since 2014. The fact that this issue was not identified for so long highlights a persistent weakness with ANZ’s assurance process," says Deputy Reserve Bank Governor Geoff Bascand.

The failure will mean ANZ has to hold an extra $277 million dollars of Operational Risk Capital because it has lost the right to work out it’s own capital levels using internal credit models. It must now opt for a more conservative standard model.

ANZ discovered the failure itself in April and escalated it to its Board and reported it to the Reserve Bank then.

An ANZ spokesperson says the issue has no impact on customers or the operation of the bank, but the bank is disappointed this error occurred.

The Reserve Bank gave no time at which ANZ could earn back the privilege of using internal modelling accreditation.

It had offered that hope to Westpac bank which remains on probation for a similar failure reported in December 2017.

"Westpac is currently remediating its internal processes and internal models and will submit evidence of its compliance with our requirements for our consideration in June," a Reserve Bank spokesperson told 1 News.

A Westpac spokesperson says the bank is making good progress to address the Reserve Bank’s requirements by 30 June.

ANZ Bank Source: istock.com


More From