RBNZ said disclosure was the cornerstone to their prudential regulation and supervision
There are three pillars to the Reserve Bank of New Zealand’s (RBNZ) regulatory framework: self-discipline, market discipline and regulatory discipline, the bank said during a speech to the NZ Bankers’ Association.
RBNZ added that public disclosure was the cornerstone of the bank’s approach to prudential regulation and supervision.
Deputy Governor Geoff Bascand said: “Timely disclosure of accurate information is an essential part of market discipline, and it strengthens self-discipline too.
“Customers, investors and others who are armed with good information can make well-informed choices about which financial institutions to use. And because we insist that the directors of banks attest to the accuracy of the information, the disclosure process supports the directors in their oversight and governance of the institutions,” Bascand added.
He said that the Reserve Bank has an ongoing commitment to improving the disclosure regime.
“We currently publish a web page of data from individual banks, but we recognise that it has limitations, so we’re now developing a Bank Financial Strength Dashboard to provide data in a user-friendly way. We expect that the Bank Financial Strength Dashboard will improve the accessibility of data and make it easily comparable for bank customers, investors and anyone else with an interest in banking.”
Bascand said for disclosure to be effective, information needs to be trustworthy.
Under RBNZ’s attestation regime, directors are responsible for the integrity of bank disclosure statements. The bank is considering enhancements to the attestation regime via more thematic reviews across banks’ internal policies and processes, a move to “positive assurance”, and guidance around risk management.
“Public disclosure by financial institutions helps to build and maintain confidence in the institution; give information that people can use when making choices, and enhance market efficiency by keeping customers and competitors well-informed,” Bascand added.
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