Chairman of Parliament's Finance and Expenditure Select Committee Michael Wood has done a 180 on his plans to request banking and insurance bosses appear before MPs.
He told Interest.co.nz on Thursday he would be requesting key industry players address the committee, given the “significant public interest” in what’s going on in the banking sector, considering the Australian Royal Commission.
After the story was published, Wood contacted Interest.co.nz to say that this was not, in fact, what would be happening.
“I have become aware of the fact that the banks themselves are effectively under a confidentially order with the Financial Markets Authority (FMA) with respect of everything they are discussing in the current process.”
The Reserve Bank and the FMA are currently investigating the sector.
It is understood officials from the Reserve Bank have been in contact with the Minister of Finance’s office to clarify the situation.
Woods says he “did not have that bit of information” when he had talked to Interest.co.nz on other subsequent occasions.
He was made aware of the confidentiality order after being contacted by Minister of Commerce and Consumer Affairs Kris Faafoi.
“I simply have not had that information put in front of me previously,” he says.
'A completely frank and open communication'
In a statement, an FMA spokesman says the confidentiality orders are in place so a it can have a “completely frank and open communication with firms during the course of our work.”
“We have stated to the banks that these orders do not prevent any firm from communicating any of its own information about the inquiry or its own practices as it wishes, and we consent to this occurring.
“Rather we wish to ensure that there is clarity that our communications and the progress of our regulatory review can be conducted in confidence through the course of this work.”
Interest.co.nz first learned the Finance and Expenditure Select Committee was considering requesting an audience with banking and insurance sector CEOs in May.
“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 at the time.
It wasn’t until Thursday that Wood became aware of the confidentiality order.
“It’s regrettable that I didn’t check that before I spoke with you yesterday, I’ll take that on the chin in terms of the due diligence.”
Rather than+ the CEOs appearing, Wood says industry representatives will front up instead.
That’s the New Zealand Bankers’ Association, the Banking Ombudsman as well as bank workers' union representatives.
Speaking to Interest.co.nz on Thursday, Wood said getting the top brass to front up to MPs was 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.
Despite not being allowed to summon the bankers, Wood says having the bank lobby group and unions speaking to MPs is still better than nothing.
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