NZ banking under spotlight after damning report on Aussie banks

Australia's long-running inquiry into its financial industry painted a less than flattering picture of the sector. Photo / file

The Australian Royal Commission's interim report into the financial services sector will form part of Financial Markets Authority and the Reserve Bank's review of local banks' conduct and culture, a spokesperson said.

The FMA and Reserve Bank are completing a review of banks' conduct and culture and will publish their report early next month.

Australia's four big banks - Commonwealth Bank of Australia, ANZ, Westpac and National Australia Bank - as well as insurers and financial advisers, have been under the spotlight since March, when the first in a series of court examinations kicked off.

In New Zealand, the Reserve Bank has completed 11 on-site monitoring visits with the banks, conducted about 400 interviews, received more than 1000 documents and visited 13 towns and cities since June.

"We will be considering the Australian Royal Commission's interim report as part of our review," the spokesperson said.

The Reserve Bank's review into life insurers is ongoing, with a report due by the end of the year.

Australia's long-running inquiry into its financial industry painted a less than flattering picture of the sector.

Commissioner Kenneth Hayne said in the interim report on Friday that wrongdoing was too often driven by greed or "the pursuit of short-term profit at the expense of basic standards of honesty".

"The banks have gone to the edge of what is permitted, and too often beyond that limit, in pursuit of profit," the report said.

Since public hearings began in March, the Royal Commission unearthed a string of scandals, including wealth advisers charging dead people for services, instances of lying to regulators about misconduct, and loan officers accepting bribes.

The report slammed the banks' culture, conduct, compliance, and remuneration practices and criticised regulators for taking a timid approach.