Reserve Bank of Australia Annual Report – 1994 Financial Statements Contingent Liabilities and Other Items not included in the Balance Sheet

Note 10 Contingent Liabilities and Other Items not included in the Balance Sheet

Contingencies

The Bank has a contingent liability, amounting to $74.5 million at 30 June 1994 ($78.8 million at 30 June 1993), in respect of the uncalled portion of its shares held in the Bank for International Settlements.

In the course of providing banking services to its customers, the Bank provides performance guarantees to third parties in relation to customer activities. Such exposure is not material and has not given rise to losses in the past.

Other items

The Reserve Bank is a defendant in litigation arising from the collapse of some financial institutions (in one of the three actions it is a third party defendant); in litigation relating to the technology used in security devices affixed to polymer notes; in a civil action in respect of an alleged debt by the Bank to a company for energy savings; and in eight common law matters and two administrative appeal matters. All will be defended, and none is judged likely to have a materially adverse effect on the activities, financial condition or operating results of the Bank.

In keeping with Commonwealth Government policy, the Bank carries its own insurance risks except where administrative costs are estimated to be excessive. Experience with self insurance claims is as follows:

Claims	Number 1992/93	Number 1993/94
0–$10,000	19	22
$10,001–$20,000	–	–
$20,001–$30,000	–	1