RBNZ proposes cheaper bank disclosure

The Reserve Bank of New Zealand has proposed halving the number of quarterly disclosure statements by banks in a move to simplify regulation and significantly reduce costs for banks.

RBNZ's head of regulatory supervision, Toby Fiennes, released the results of a one-year regulatory stocktake in a speech on Tuesday and published a set of proposals for banks, along with an industry update for non-bank deposit takers.

"Overall, we expect that the changes that are being considered as part of the stocktake will result in significant cost savings for banks, and improvements in the efficiency of the regulatory regime," Fiennes said.

The stocktake was launched after a range of regulatory tightenings and changes over the last decade in the wake of the financial crisis, the collapse of the finance company sector in New Zealand and the introduction of Basel II and III rules on capital.

Fiennes said the stocktake was not designed to consider capital and liquidity rules, but instead focused on areas such as information disclosure and Reserve Bank oversight of managers and executives.

He said the stock-take found banks questioned the value of 'off-quarter' disclosure statements, which relate to the first quarter and third quarter reports 'in-between' half year and full year reports.

The bank would move carefully to ensure any removal of off-quarter reports did not open gaps in the regulator's prudential framework, Fiennes said.

"In saying that, we are also well aware of the concerns banks have raised about the financial and opportunity costs created by having to prepare off-quarter disclosure statements, and the importance of assessing whether the benefits of this requirement still outweigh the costs," he said.

The regulator proposed four options on whether to keep the reports, ranging from retaining the status quo, removing the requirement for banks with retail deposits under NZ$200 million to produce off-quarter reports, scaling back the content of off-quarter disclosure statements to just capital and asset quality disclosure, and removing the requirement for off-quarter statements altogether for all banks.

Fiennes said the bank had not formed a view on what was the best option and wanted feedback on costs and benefits from the industry.

The Reserve Bank was also looking at scaling back disclosures relating to concentrated credit exposures, he said.

Submissions close on September 16 with final decisions expected before the end of 2015.