Michael Wood, the Chairman of Parliament's Finance and Expenditure Select Committee, says summoning bank CEOs to appear before MPs is an ‘open and live option’  

Michael Wood.

By Jason Walls

The country’s top banking executives could be summoned to Wellington to convince MPs that New Zealand’s banking practices are different from those of their Australian counterparts.  

This follows a damning Royal Commission across the Tasman that uncovered a culture of widespread poor conduct within the banking sector.

Finance and Expenditure Select Committee Chairman Michael Wood told interest.co.nz that getting banking and financial sector bosses to front up to MPs is an “open and live option.”

“There is clearly a great deal of public interest in this issue and it’s really important to people for confidence that our financial institutions are engaging in ethical behaviours,” Wood said.

Earlier this month the Financial Markets Authority (FMA) and the Reserve Bank ordered bank bosses to prove their banks are better behaved than those in Australia, which include the parents of ANZ NZ, ASB, BNZ and Westpac NZ.

Wood, the Labour Party MP for Mt Roskill, says his select committee is seeking a briefing from the regulators to get an update on this process.

“What I have indicated is beyond that, we leave open the option of requesting the financial institutions, and other people with interest in the issue, might appear before the committee.”

Wood says the committee will decide after it has heard from the FMA and the Reserve Bank if it needs to hear from banking bosses as well.

But he says he will summon industry chief executives if he feels it’s necessary.

“We haven’t determined that as a committee, but I am very much leaving that open.”

New Zealand Bankers' Association Deputy Chief Executive Antony Buick-Constable says at the moment, the banks are focusing their attention on providing information to the regulators as part of their current review.

“That’s about providing evidence that we don’t have the kinds of systemic issues identified in Australia.”

Onus on the banks

FMA Chief Executive Rob Everett told RNZ earlier this month that the onus was on New Zealand banks to demonstrate why and how practices were different in New Zealand. The FMA has asked bank bosses to detail what they're doing to prove consumers, regulators and other stakeholders can have full confidence in the financial services sector. The banks have until this Friday, May 18, to respond.

Finance Minister Grant Robertson has echoed Everett’s comments.

He has previously said the scale of the issue in Australia is “so significant, there is an obligation on New Zealand banks to show that evidence,” given the dominance of Australian owned banks in New Zealand.

Wood says this is the rationale behind potentially bringing in the bank bosses.

“If we go down that track, it gives us the opportunity to inform Parliamentarians, but also the public, about what’s going on and hopefully give some assurance.”

Finance and Expenditure Select Committee staff are in the process of arranging a time for the FMA and the Reserve Bank to be questioned by MPs.

After that, Wood will assess whether or not it’s appropriate for banking and financial institution CEOs to appear in front of the committee.

Buick-Constable says it’s important the regulators have a chance to assess the information from banks. “They can then set out the next steps.”

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14 Comments

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Either you have a Royal Commission in line with Australia or don’t bother. To think that the banks would appear and self confess is like the police asking a burglar to own up to a job that they (the police) do not even know about. You have to wonder if any of our politicians have ever worked in the real world.

Sounds like a fishing expedition by politicians. In the hope that the find something. Where are the Financial watch dogs on this Reserve Bank and FMA ???

Perhaps if they agree to waive their right to the defense of plausible deniability???

Would that then be much the same as implausible honesty?

Seems like yesterday the managers of finance companies were issueing statements to the fact that they could not see any issues that could affect their company.
What memories.

Oath or Affirmation?

Neither for a select committee.

The other day I looked to see if I could find any examples of Ombudsman decisions that could have a broader effect for many New Zealanders. It took me less than two minutes. But nothing to see here.

Details?

So the government is prepared to base it's judgement on the managers skills as spin artists. I would have thought that a bit of hard work investigating them and uncovering the facts was more appropriate.
The government's approach sounds more like "come and tell us that you are squeaky clean so that we can be seen to be doing our jobs and put the public's mind to rest." A lazy, weak minded and pathetic approach.

Forget "open and live" how about open and frank discussion aka direct, honest and not hiding behind layers of bs.

Typically you have to investigate conduct prior to asking the questions. Superficial questions get appropriate answers.

It is very interesting that in all other respects the CoL have elected for an inquiry, except for this one issue.

Jacinda et al (namely Peters) has most likely said "not on my watch"

Spin doctors are without a doubt working overtime