What the FMA said to banks
To the Chief Executives of NZ Banks and NZBA
New Zealand Banks' response to the Australian Royal Commission into misconduct in Banking, superannuation and other financial services (Royal Commission)
Thank you for meeting with us on Monday evening. It was positive to hear the expressions of concern in relation to issues raised at the Royal Commission. As we said at the meeting, we both believe that the nature and extent of the issues within financial services in Australia and the obvious cross-over in terms of entities, people and practices into New Zealand demands a strong response from the industry here and from the regulators.We would like to set out the expectations of the FMA and the Reserve Bank as to next steps and to clarify the information and actions required from your organisation. Our objective in this exercise is to understand what work you have undertaken to review your operations to promptly identify and address any conduct and culture issues. We expect you to show us what you have done in order to be comfortable that there are no material conduct issues within your business. We anticipate that you will have undertaken an exercise of that nature after our Conduct Guide (published in February 2017) and may be extending or enhancing that work in response to issues raised at the Royal Commission or more broadly as a result of that inquiry.
As we discussed on Monday, the window for you to demonstrate to consumers, regulators and other stakeholders that they can have full confidence in the financial services industry in New Zealand is narrow, and we encourage proactive leadership from the retail Banking sector.
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