National: Reserve Bank role needs scrutiny
[UPDATED] National says the New Zealand response to the Australian Royal Misconduct into Misconduct in the Banking, Superannuation and Financial Services Industry has been appropriate - but there's more the government could be doing to ensure banks are behaving.
Monday, June 18th 2018, 6:01AM
by Susan Edmunds
The FMA and Reserve Bank have asked banks and life insurers for information about what they are doing to tackle conduct risk and the issues highlighted by the Australian inquiry.
The Australian inquiry has highlighted widespread misconduct and businesses' own interests being placed ahead of customers'. Many of those same institutions are the parent companies of New Zealand firms.
Michael Wood, chairman of Parliament's Finance and Expenditure Select Committee, said he would request banking and insurance bosses come to Parliament to front up to MPs. He has since reversed that position.
National finance spokeswoman Amy Adams said what had happened so far had been the right response.
The regulators had been proactive going to the banks for information. What should happen next would depend on what was uncovered, she said. If there were concerns, it was appropriate that bank bosses appeared before MPs.
But she said New Zealand had not had the same public airing of concerns as Australia before the inquiry was launched. There would need to be signs that there were issues here, too.
Adams said New Zealand could not afford to be complacent, though.
"We need to go through the process of saying to banks 'show us why you're different'."
She said there was a wider question around the Reserve Bank's role as a supervisor of the banking sector, and whether it was adequately resourced to fulfill the role - highlighted in reports by the NZ Initiative and IMF.
She said the opposition would expect to see that picked up as part of the review of the Reserve Bank, looking at whether the Reserve Bank was correctly fulfilling its role, "in what's a pretty important area."
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