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RBNZ, FMA break law, waste $2m, find almost nothing

Press Release – ACT New Zealand

The Financial Markets Authority and the Reserve Bank have gone rogue with their Bank Conduct and Culture study, according to ACT Leader David Seymour.
The Financial Markets Authority and the Reserve Bank have gone rogue with their Bank Conduct and Culture study, according to ACT Leader David Seymour.

“As the report admits ‘Neither [the FMA or the Reserve Bank] has a direct legislative mandate for regulating the conduct of providers of core retail banking services (lending, credit, bank accounts).’ But they went and did the $2 million dollar study anyway.

“Government agencies such as these are not laws unto themselves. They are supposed to follow the law like everyone else, like, ironically, the banks they investigated are supposed to.

“Instead, they have carried out an extra-legal study at enormous expense to the taxpayer. Bank Governor Adrian Orr has admitted that the report required 14,000 hours of staff time to complete.

“If they’d found anything useful the $2 million price tag might be worth it, but they did not. From the report itself:

“…conduct and culture issues do not appear to be widespread in banks in New Zealand at this point in time.”

“In other words, the report found nothing that mightn’t be found in any organisation, perhaps even the FMA and the Reserve Bank themselves if they were to be investigated. Instead, it clutches at straws and speculates that somewhere, somehow, there might be something wrong.

“As Michael Reddell points out, customers clearly believe banks are providing good service. 82 per cent of people believe banks listen to their needs and 69 per cent believe banks tailored their advice.

“The Bank and the FMA should be chastised by their Boards for this extra-legal time wasting and mission creep done at the taxpayer’s expense.”

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