The Reserve Bank has told Westpac it must commission two independent reports to address concerns the regulator has around the bank's risk governance processes.
Geoff Bascand, deputy governor and general manager of financial stability at the Reserve Bank, said it had experienced ongoing compliance issues with Westpac New Zealand in recent years.
Bascand said most recently it had dealt with the bank over material failures to report liquidity correctly and the bank had 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."
It had also required Westpac to provide a separate independent report to provide assurance that the actions they have taken to improve the management of their liquidity risks, and the culture surrounding it, are effective.