Reserve Bank of Australia Annual Report – 2011 Financial Statements Note 11 – Contingent Liabilities and Other Items Not Included in the Balance Sheet

The RBA has a contingent liability, amounting to $53.5 million at 30 June 2011 ($62.3 million at 30 June 2010), 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.

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

As outlined in Note 16, the Bank has made certain provisions in relation to the charges laid against NPA and Securency on 1 July 2011 and against Securency on 10 August 2011. However, in light of uncertainties associated with these allegations it is not possible to make a reliable estimate of all of the potential costs associated with this matter as at the date of preparing these accounts.