Sir John Key has admitted ANZ New Zealand's directors failed in their due diligence obligations to the Reserve Bank over the use of a risk capital model which was decommissioned without approval.

The error resulted in a Reserve Bank censure and an order to ANZ New Zealand to increase capital for operational risk by around 60 per cent to $760 million as a safety net to absorb possible losses.

"We one hundred per cent own that problem," said Key, who chairs ANZ New Zealand's board and sits on the board of ANZ's Australian parent. "I own that problem. There's no

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