The Reserve Bank of Australia warned ASX chief executive Helen Lofthouse that it had lost confidence in the exchange’s ability to manage critical market infrastructure just two months before ageing settlement and clearance systems ground to a halt and sent traders into a panic.

The extent of the central bank’s concerns are laid bare in a confidential letter sent by its assistant governor, Brad Jones, which raises concerns about an “entrenched culture” that approached recommendations to resolve risk-related issues “as a reactive and narrow compliance exercise”.