The FMA will next turn its attention to the insurance industry. Photo / Getty Images.
The FMA will next turn its attention to the insurance industry. Photo / Getty Images.
Fresh from a meeting with New Zealand's major banks finance watchdog boss Rob Everett says he also plans to meet with insurers to ask for assurances over their conduct.
Everett, chief executive of the Financial Markets Authority and Reserve Bank governor Adrian Orr called a meeting with 15 New Zealand bank bosses on Monday after damning revelations from Australia's Royal Commission into misconduct in the financial services industry.
Last week saw the completion of a second round of hearings by the Royal Commission which centred around financial advice.
It revealed financial service provider AMP had charged fees for no advice and lied to the regulator while Commonwealth Bank of Australia admitted charging fees to clients that were deceased.
Up until now the FMA and the RBNZ have said they were watching the inquiry closely but would wait until the first report came out on September 30 before taking action.
Everett said over the last couple of weeks he had spoken individually to all the chief executives of the big banks - the four Australian-owned banks - ANZ, ASB, BNZ and Westpac as well as Kiwibank and Heartland Bank and financial services firm AMP.
But as events unfolded at the Royal Commission he and Orr decided jointly to call the banks together and approached the New Zealand Bankers Association council to organise it.
"Over this last two weeks, which was the second phase of the Royal Commission, the tenor of some of the stuff being highlighted, particularly the failure to fix issues discussed by the regulator several years ago, and adding to that the lying to the regulator....
"We just felt that it wasn't enough for the New Zealand banks to say New Zealand is different and it is not happening here."
Everett said it had asked the banks to come back with an initial response in the next couple of weeks to explain what they were doing before the Royal Commission and what they were now doing in response to it.
And he said it was not just the banks in its sights.
"Whilst the commission hasn't gone there yet...and they may not...we have asked insurers for a similar meeting."
Financial Markets Authority chief executive Rob Everett says he plans to meet with insurers to ask for assurances over their conduct. Picture / Supplied
Everett said he would look to hold that meeting in a few weeks time once he had returned from overseas, although a date had yet to be set.
It was also having conversations with AMP which was not a bank.
Everett said there had been no political pressure to make a move on the banks, despite criticism from some MPs.
Cabinet minister Shane Jones, told the Weekend Herald, he was surprised that new Reserve Bank governor Adrian Orr had so quickly ruled out the need for a New Zealand banking inquiry.
Jones said he did not have a position yet on whether a similar inquiry was needed in New Zealand.
"Although I think it's fair to say that we found it quite curious that Adrian [Orr] ruled out the need for such an inquiry after only having taken up the role at the Reserve Bank," he told the Weekend Herald.
"So obviously, he's made his mind up very quickly there, so that came as a bit of a surprise."
Orr, who took up the top job at the Reserve Bank a month ago, told TVNZ's Q+A that he did not think such an inquiry was needed here.
"The true problem and challenge that is going on in Australia is cultural. It's not whether the regulator was awake or asleep. It's cultural," Orr said.
