Reserve Bank of Australia Annual Report – 1997 Financial Statements Note 10

Note 10 Contingent liabilities and other items not included in the balance sheet

Contingencies

The Bank has a contingent liability, amounting to $62.8 million at 30 June 1997 ($67.8 million at 30 June 1996), 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 before the Federal Court relating to a loss allegedly suffered by a firm over the issue of the new series currency notes, and in two common law matters. The Bank is an appellant in a case regarding a payroll tax assessment and is a respondent or third party before the Administrative Appeals Tribunal in three matters concerning workers' compensation. All cases in which the Bank is involved are being 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 claims, including workers' compensation claims from 1 May 1996, is as follows:

	Number of Claims on Bank
	1996	1997
0–$10,000	15	64
$10,001–$20,000	–	1
$40,001–$50,000	–	1