The Reserve Bank of New Zealand yesterday outlined a revised outsourcing policy for large banks. The updated policy follows a review - which was started two years ago - by the RBNZ, and is intended to overcome the failure of a key service provider to a bank. Banks are now required to ensure that a range of resolution options, including open bank resolution, is available in the unlikely event of a bank failure. This action is intended to support financial stability in times of stress.The review concluded that greater clarity of the policy and more consistency of application by banks was needed to ensure that they could continue to provide required help - that is, liquidity and basic services - in times of stress. "The revised policy sets requirements that banks need to meet when outsourcing particular functions and services, especially if the service provider is a related party of the bank," Deputy Governor Grant Spencer said.  It applies to locally-incorporated registered banks with net liabilities of more than NZ$10 billion, and comes into force on 1 October 2017. Affected banks will have five years to come into compliance with the revised policy, which replaces an earlier policy introduced in 2006.