Reserve Bank seeks internal review after accidental disclosure

Reserve Bank Governor Adrian Orr after announcing they have left the official cash rate unchanged at 0.25 per cent, in November. Photo / Mark Mitchell

The Reserve Bank has engaged Deloitte to independently review internal processes, after information was accidentally disclosed to a small group of financial services firms a short time before it was made public in the November Monetary Policy Statement (MPS).

The accidental disclosure was included in a letter sent to non-bank financial institutions to finalise a consultation process, the RBNZ said in a statement today.

The letter confirmed the Reserve Bank's decision to introduce a Funding for Lending Programme (FLP), but did not contain specifics of the FLP.

The market already widely expected the confirmation of the FLP scheme in the Monetary Policy Statement.

But the information should not have been communicated until after the 2pm release.

It was sent 45 minutes early, the RBNZ said.

"The limited information contained in the letter is unlikely to have provided anyone with a market advantage, but the Reserve Bank is taking the matter seriously."

"The Reserve Bank is working closely with the reviewers, and will comment further on any outcomes when the review is complete."

Funding for Lending (FLP) is a mechanism for the RBNZ to lend some of its freshly printed cash directly to commercial banks at special rates - as opposed to just providing a wholesale lending facility (which it does with its Official Cash Rate).

FLP would effectively offer commercial banks a discounted retail rate which would lower their funding costs and enable them to cut mortgage rates further.

In its announcement last Wednesday no details of the scheme were released, with the announcement confirming it would begin in December.

Detail about the scheme are expected in coming days.

The disclosure breach comes four-and-a-half years after the Reserve Bank abolished media "lock-ups" for the OCR announcement because TV3 broke an embargo.