RBNZ expects the bank to continue to transition to a proactive risk culture
Westpac NZ’s liquidity risk management is moving in the right direction, but needs to continue to improve towards a proactive risk culture, according to the Reserve Bank of New Zealand.
Read more: Reserve Bank seeks feedback on liquidity policy review
In March 2021, Westpac NZ was ordered by RBNZ to commission an independent report to assess the management of its liquidity risks and the culture surrounding it, after the major bank was found to have not properly complied with the central bank’s Liquidity Policy.
The report, prepared by Deloitte, found that Westpac NZ’s liquidity-control environment has improved as a result of the repatriation of the NZ bank’s liquidity model from its parent company and other risk-management enhancements. Deloitte’s assessment found no material gaps in the changes made, but detailed a number of further recommendations to enhance the progress that Westpac NZ has made to date.
Read next: Kiwibank responds to RBNZ liquidity findings
“We are encouraged to see that Westpac NZ has taken the necessary steps to improve its liquidity risk management and risk culture by increasing its resourcing and improving its governance processes,” said Christian Hawkesby, RBNZ deputy governor. “We expect that the momentum built to date will allow Westpac NZ to continue the overall transition from a reactive, to a proactive risk culture.”
Hawkesby said RBNZ maintains its assessment that “Westpac NZ’s financial position is sound.”
