Westpac censured by Reserve Bank over governance
The Reserve Bank has forced Westpac to conduct two independent reviews into potential risk governance failings amid "ongoing compliance issues".
Wednesday, March 24th 2021, 5:01AM
The reviews will look at Westpac's compliance with liquidity rules and risk governance practices.
"We have experienced ongoing compliance issues with Westpac NZ over recent years, most recently involving material failures to report liquidity correctly, in line with the Reserve Bank’s liquidity requirements," RBNZ deputy governor Geoff Bascand said. "Furthermore, the bank has continued to operate outside of its own risk settings for technology for a number of years.
"Westpac NZ needs to take a close look at its risk governance practices. To ensure this happens we are requiring them to provide an independent report that assesses Westpac NZ’s risk governance processes and practices applied by the Westpac NZ Board and executive management."
The RBNZ has asked Westpac for a separate independent report to provide assurances that it has taken action to improve its management of liquidity risks.
Until it can turn in the report, the central bank has increased the amount of cash or cash-like assets that Westpac needs to hold.
The Reserve Bank will work with Westpac to implement the findings of each report.
Westpac's liquidity and funding positions remain sound, the RBNZ said, despite the governance failings.
"The reviews outlined today are to ensure this remains the situation on an ongoing basis," the central bank stated.
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