Chairman says bank bosses to be called before Parliament's Finance and Expenditure Select Committee as FMA & RBNZ probe into sector continues

By Jason Walls

Michael Wood, Chairman of Parliament's Finance and Expenditure Select Committee, says he will be requesting banking and insurance bosses come to Parliament to front up to MPs.

He previously floated the idea of hauling in bank bosses but wanted to wait until the Reserve Bank (RBNZ) and the Financial Markets Authority (FMA) presented to the committee, which they did at the end of May, before making a final decision.

Speaking to Interest.co.nz, Wood now says getting the sector’s top brass to front up to MPs is an appropriate step, given the “significant public interest” in what’s going on in the banking sector.

“What has influenced my view that we need to proceed with the process at this stage, is firstly that it’s going to be a little while before we hear back from the RBNZ and the FMA.”

The regulators are not due to report back to the committee until October.

“I think if we were going to get a quicker response – and that’s not a criticism of the RBNZ and FMA – but if we were, then we would have been less likely to go through this process.”

Wood, the Labour MP for Mt Roskill, says the committee was “very satisfied” with the regulators' presentation earlier this month.

Speaking to the committee FMA CEO Rob Everett said their preliminary monitoring work into banks hasn't turned up evidence of widespread, systemic issues that warrant a commission of inquiry in New Zealand. The FMA and RBNZ are also probing the life insurance sector.

“On the work to date I would say we've seen plenty that we think can and should be done better, but we have not seen evidence of systemic and widespread misconduct,” Everett said.

Wood says given the “significant public interest in this issue,” it seems appropriate that there is a public forum in which MPs can ask appropriate questions.

He does not have a timeframe at this stage but says he and the committee will hammer out more details next week.

And it won’t just be the bankers who will be requested to present to the committee.

“We will then also be asking other people like [bank workers' union] First Union, the Banking Ombudsman, the [NZ] Bankers' Association and Consumer New Zealand to come in to provide their perspective too.”

Although a select committee chairperson can request an audience with a party, they cannot compel anyone to attend. Only the Speaker of the House can legally make people appear before committees. However, it appears unlikely bank bosses would refuse to attend a select committee hearing if asked.

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