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Assessing the NZ financial system

Friday 1 June 2018

The Reserve Bank of New Zealand (RBNZ) is concerned about the about the impact that Australian royal Commission might have an impact the confidence in the New Zealand financial system.

An official statement released from the RBNZ:

“Following the meeting with bank CEOs, the RBNZ and the FMA, with the support of the Commerce Commission, wrote to 10 locally-incorporated New Zealand banks with major retail operations on 3 May, initiating a “review of conduct and culture by New Zealand financial services entities”. Banks were given a deadline of 18 May to respond.  Notwithstanding that insurance has not featured in the RC at this stage, we wrote similarly to 15 major life insurance companies on 23 May, asking that they respond by 22 June.

The RBNZ noted that so far they have not seen ‘evidence of widespread, systemic issues to warrant a commission of inquiry’.

The two New Zealand financial industry regulators have also been assessing bank responses in a review into conduct and culture.

RBNZ and the FMA are also reviewing their legislative frameworks.

The findings from the inquiry and legislative review is expected to be completed later this year and this to coincide with the initial report of the Australian Royal Commission expected at the end of September.

Responses from the insurance industry will not be expected until the 22 June.