Reserve Bank of Australia Annual Report – 2005 Financial Statements Note 11

Note 11 CONTINGENT LIABILITIES AND OTHER ITEMS NOT INCLUDED IN STATEMENT OF FINANCIAL POSITION

Contingencies

The RBA has a contingent liability, amounting to $68.8 million at 30 June 2005 ($63.9 million at 30 June 2004), in respect of the uncalled portion of its shares held in the Bank for International Settlements.

In the course of providing services to its customers, the RBA 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 RBA has commitments of $0.5 million at 30 June 2005 ($3.2 million at 30 June 2004) payable within one year; and no commitments payable beyond one year ($0.5 million at 30 June 2004).

The RBA carries its own insurance risks except where external insurance cover is considered to be more cost-effective or required by legislation.