Reserve Bank of Australia Annual Report – 1996 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 $67.8 million at 30 June 1996 ($76.4 million at 30 June 1995), 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 civil litigation arising from the collapse of some financial institutions in Victoria; in civil litigation relating to a loss allegedly suffered by a firm over the issue of the new series currency notes; and in four common law matters. The Bank is an appellant in a case regarding a payroll tax assessment and is a respondent before the Administrative Appeals Tribunal. All cases in which the Bank is defendant or respondent 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.

The Bank carries its own insurance risks except where administrative costs are estimated to be excessive. Experience with self insurance is as follows:

	Number of Claims
	1994/95	1995/96
0–$10,000	4	15
$10,001–$20,000	1	–
$30,001–$40,000	2	–