NZBA rejects Australia comparisons and pledges reforms

The NZBA has responded to pressure from the Reserve Bank and Financial Markets Authority to detail evidence of how New Zealand banking culture differs from that in Australia after a raft of misconduct scandals emerged from Australia’s Royal Commission.

In an open letter to Reserve Bank governor Adrian Orr, and FMA chief executive Rob Everett, the NZBA said there were “indicators of strong culture” within the country’s banking system. The NZBA said New Zealand had “a different regulatory framework" to Australia, "which encourages open dialogue”.

The NZBA said New Zealand’s regulatory environment, “focused on consumer outcomes”, was a major difference between the two markets. The trade body also outlined contrasts between the two countries’ pension markets, adding Australia’s large superannuation scheme made regulation and enforcement “difficult”.

NZBA added New Zealand’s biggest banks were governed by independent boards that acted in the best interests of the banks, and not an “offshore parent”