The conduct of ANZ boss David Hisco and culture around his expense claims will fall outside the scope of a much anticipated review of local banks, due to be released by the Reserve Bank and Financial Markets Authority later this month.
Despite being called a "conduct and culture review" the FMA today confirmed that it would not deal with any issues relating to the chief executive's departure.
Hisco's personal use of chauffeur-driven cars and wine storage costs using the bank's money have ended his relationship with ANZ after nine years in the top job.
ANZ said that concerns about Hisco's personal expenses stretched back nine years and amounted to "tens of thousands of dollars" in company money.
"The current issue at ANZ is an internal employment matter and these types of issues were not the subject of the FMA and RBNZ Conduct and Culture review," FMA spokesman Andrew Park said, in response to questions from the Herald.
"Our review focused on the treatment of customers and the systems and controls banks had in place to manage conduct risk. These type of employment issues were not in scope for our review."
Yesterday the RBNZ said it had been made aware of the ANZ's issue with Hisco on May 29.
ANZ chairman Sir John Key said it had been a matter of internal review for three months.
Finance Minister Grant Robertson today said there were still questions ANZ needed to answer about the saga, particularly around the disclosure of when this occurred and making sure the ANZ did fulfil its requirements.
"I know the Reserve Bank is still talking to them about that incident," he told the Herald.
The Reserve Bank confirmed it was still in discussions with ANZ around the issue - outside the scope of the conduct and culture review.
"The Reserve Bank has been kept closely informed by ANZ New Zealand chair Sir John Key, as these matters have emerged over the past two weeks," a spokesperson said.
The RBNZ has declined to comment further citing a policy "not to comment on ongoing issues".
The issue - following ANZ's censure by the RBNZ for a breach of capital rules last month - has led former BNZ chairman Kerry McDonald to call for a New Zealand Royal Commission into banking.
Australian banks - the parent companies of New Zealand's ANZ, ASB, Westpac and BNZ - were last year subject to a Royal Commission which found serious breaches of conduct and culture.
In the wake of the Royal Commission, ANZ's Australian chief executive, Kiwi Shayne Eliott, initiated a trans-Tasman review of expenses which highlighted the issues with Hisco.
In New Zealand regulators have opted for a less sweeping review of bank culture, expressing general confidence in the practices of the local industry.
"Our initial report last year identified some gaps in the regulation of conduct at the banks," the FMA's Park said.
"The government has released an options paper for consultation on the issues raised in our report."
These largely deal with issues around customer protection.
"Culture within financial firms is driven by the board and it is matter for the board how they deal with the behaviour within their firms," Park said.
"The internal employment processes of the banks are not within the FMA's remit. We don't currently have a specific conduct mandate over the banks."
Asked whether the situation raised any issues around market confidence which might fit the FMA's broader mandate, Park said:
"We consider these questions are best answered by ANZ to see how they follow through on these issues.
"We have stated in our initial report into the review of conduct and culture that boards set the tone of culture that is expected throughout their organisations."