RBNZ presses ahead with dashboard plan, despite bank concerns

The Reserve Bank of New Zealand (RBNZ) plans to go ahead with its proposed "dashboard" approach to bank disclosures, it said today (February 14), despite concerns raised by many financial institutions.

The dashboard would bring together banks' regulatory disclosures in a single place on the RBNZ website, making it much easier to make comparisons. The central bank believes it would boost market discipline, and set out its ideas in a consultation document published in September 2016.

The consultation drew a mix of responses. Banks tended to support the RBNZ's overall aim of improving disclosure, but most were in favour of "option B" – requiring banks to publish off-quarter disclosure statements on capital, asset quality and liquidity, in line with Pillar 3 of the Basel framework, but not bringing them together in one place.

Some banks were concerned that without sufficient context, people viewing the regulatory dashboard would not be able to fully understand the figures.

ANZ Bank warned retail investors might miss important details. "ANZ is of the view that few retail investors will understand and appreciate the differences between the structures of the various locally incorporated banks in New Zealand, and will therefore be unlikely to properly interpret the information," it said in its submission.

Westpac made a similar point, noting that under option B, banks could provide additional detail, while under option A, the dashboard, users would have to click through to further information.

Commenters also raised concerns about the timing of information published, control and ownership of the data, and the inclusion of short-term liquidity metrics, which can be volatile.

Nevertheless, the RBNZ plans to push ahead. "After carefully reviewing all feedback, the reserve bank considers that the concerns raised about the dashboard proposal should be able to be addressed, and the dashboard remains the bank's preferred option to enhance market discipline by increasing the effectiveness of the bank disclosure regime," said deputy governor Grant Spencer.

The RBNZ is planning to "further engage" with stakeholders in the coming months to refine the dashboard idea, Spencer added.