The Chairman of Parliament's Finance and Expenditure Select Committee has reversed his decision to request banking and insurance CEOs appear before the Select Committee

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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13 Comments

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It's a dodgy thing, that there is a 'confidentially order with the Financial Markets Authority (FMA) with respect of everything they are discussing in the current process.' It's clearly not in the public interest so who does such an order serve? Why the banks and their cosy regulators of course.

Bloody hell, is this for real?

This action is not surprising at all.
As I posted when this was first announced by the FSC that they would be calling bankers and insurers to front, that it did not seem to be appropriate when the FMA and RBNZ were conducting on-going inquiries (which I understand will be completed by October).
Without detailed information of wrong doings - if there is any - which I assume that the FMA and RBNZ will obtain, then the FSC would be a toothless tiger and the hearing a waste of time.
It is pretty obvious; the correct process should be for the FMA and RBNZ to complete their inquiry and then, if specific information warrants it, the FSC bring the banks and insurance companies to task in a public forum.
As I stated earlier, the FSC really only have one shot at this and as such they need to have all information and facts. I am left wondering at the intelligence of Wood in trying to preempt the FMA and RBNZ.

I still remain concerned that a process for any affected individuals to raise concerns has not been put in place as was the case in Australia.

Banks..TBTF and Too Hot To Touch ?

Time to have the wool pulled over his eyes by a lobby group.

The picture on this article reminds me of the Temple of Gozer. Perhaps we need Ghostbusters to deal with the banks.
https://www.youtube.com/watch?v=m9We2XsVZfc

“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.”

Amateur hour.

I no longer think that it is a case of banks being too big to be allowed to fail by governing powers. I suspect that the worlds banking system will eventually fail and it will do so spectacularly. Only then will there be a slight hope that the powers that have allowed this situation to develop will be replaced by truly competent persons and sensible financial systems.

Nothing to see here... move along.

This carry on simply raises public suspicion that findings are only on a need to know basis and that the AU parents being poor role models may have condoned some local lending missadventure.

Parliament shut out by the bureaucrats?

Was there ever a TV series "No Minister"?

Given the mess that we seem to have landed in with CBL insurance, might one be forgiven for feeling a little uneasy about the apparent proliferation of what the Brits so charmingly call "gagging orders"

Great to see the FMA promoting “transparency in our financial markets” with what is fundamentally a gagging order.

Our goals are ...

RESPECTED
Astute, Credible, Fair, Accountable, Consistent, Transparent

Is the Banking Ombudsman an industry representative? How close are they and the Bankers Association? I get they are funded by the industry but it would be really interesting to know how else they are tied? Do they share resources? Offices? They always seem to share communications.

The Bankers Ombudsman is supposed to be independent but my experience hasn't found that. When the National bank(ANZ) tried to send documents through with the information altered all they did is go back to them and ask for the real doc's.