Banks won't be singled out in regulators' conduct report

Financial Markets Authority chief Rob Everett. Photo / Supplied

Individual banks won't be singled out in a culture and conduct report due to be released by regulators early next month.

Rob Everett, chief executive of the Financial Markets Authority, said in a newsletter released yesterday that it was currently working with the Reserve Bank to finalise its review of bank conduct and culture.

The review was announced in May after damning revelations about the Australian banks and other financial service providers were revealed as part of Australia's Royal Commission into misconduct in the financial services industry.

New Zealand's four major banks - ANZ, ASB, BNZ and Westpac are all Australian-owned.

Everett and Reserve Bank governor Adrian Orr called bank leaders to Wellington for a meeting and then asked for written responses providing assurances that the same problems raised in Australia were not happening here.

Since then the FMA and RBNZ have undertaken a four month review to examine what culture and conduct risks and issues are present in New Zealand banks and what steps were being taken to identify, manage and remediate them.

"Since June, we have completed on-site monitoring visits with 11 banks, conducted about 400 interviews, received more than 1000 documents and visited 13 towns and cities around NZ," Everett said in the update.

"Our review was based on interviews with bank staff and directors, and documents supplied to us by the banks."

But unlike the Australian Royal Commission Everett said it had not undertaken an audit of individual files or accounts or a detailed inquiry.

"We have relied on the information and insights provided to us directly by banks, consumer and industry bodies, and other external stakeholders."

Everett said its findings would cover general themes relevant to the industry as a whole.

"Findings that relate to individual banks will be provided directly to the banks involved and they will be required to deliver a plan to address any risks identified."

The approach is synonymous with previous FMA industry reports which tend to highlight issues rather than individual businesses and even when issues about individual businesses are raised the company is typically not named.

Everett said good conduct required an ongoing focus and putting the customer at the centre of all activities.

"We expect the banks to take our recommendations seriously, and devote sufficient focus and resources to making any necessary meaningful improvements."