(Bloomberg) -- New Zealand’s banking sector doesn’t share the cultural problems that are coming to the surface at an inquiry into misconduct in Australia’s financial industry, Reserve Bank Governor Adrian Orr says.
“The true problem and challenge going on in Australia is cultural,” Orr said Sunday in an interview on Television New Zealand’s Q+A. New Zealand bank culture “is infinitely better than some of the activity you’ve seen in Australia,” he said.
Australia’s Royal Commission heard last week that a financial planning unit owned by Commonwealth Bank of Australia collected fees from the accounts of dead people and that a Westpac Banking Corp. adviser whose misconduct has cost the lender A$2.2 million ($1.7 million) in customer compensation was driven by a desire to increase his bonus.
Orr said the RBNZ, which is the nation’s banking regulator, is watching the progress of the inquiry because Australia’s four biggest banks together hold about 90 percent of deposits in the New Zealand financial system. He doesn’t see the need for a similar inquiry in New Zealand.
“Why search for a problem yet to be identified?” he said. “I don’t see any lack of confidence in banks in New Zealand.”
Orr said the RBNZ operates a regulatory regime designed to make banks more transparent by increased financial disclosure while also imposing requirements on boards and senior managers to justify their decisions.
“Boards attesting and signing off on issues comes down to the moral fiber of the institution,” he said. “Market discipline and self discipline are critical. That’s sunlight coming in, and hopefully disinfectant.”
©2018 Bloomberg L.P.