The Financial Markets Authority (FMA) has said that the complacency of New Zealand banks and insurers in the face of Australian inquiry into misconduct was “frustrating” and “hard to comprehend.”
Rob Everett, chief executive at FMA, spoke at the launch of a new financial integrity self-assessment tool for financial service providers developed by anti-corruption group Transparency International New Zealand (TINZ).
He said that he expected banks and insurers to act long before the FMA and Reserve Bank of New Zealand (RBNZ) reviewed conduct in the financial sector last year.
"The banks and life insurers have had years to prepare for this. I found it hard to comprehend that the industry didn't get its act together and have a perfect story to tell,” said Everett.
Everett commented that while the local review found “relatively little evidence of widespread misconduct” or illegal activity, they were still not confident that things happening in Australia could not happen in New Zealand.
“We were frustrated. The Conduct Guide (published by the FMA in February 2017) had either not really been looked at all by many of the institutions who were not directly licensed by us or had been looked at, discussed at board level, and then put to one side to gather dust in the corner,” said Everett.
“We saw insufficient action. In the life insurance sector in particular, notwithstanding that many of those firms are owned by overseas players who've been through the mill on this topic, we saw virtually no recognition of the fact that the Conduct Guide had even been published."
TINZ chair Suzanne Snively challenged banks and insurers to participate in the organisation’s financial integrity system assessment to help them meet both regulators’ and customers’ expectations.
The first round of self-assessments using the tool will occur in about two months’ time.