Robertson censures Key over junior staffer remarks

Grant Robertson has censured ANZ, saying “shareholders and staff members” will be disappointed with the imbroglio over former CEO David Hisco’s expenses. 

Robertson also turned his fire on ANZ board chair Sir John Key, the former Prime Minister. On Monday Key said an error that caused the bank to hold less capital than required under an agreement with the Reserve Bank was partly the fault of a junior staff member.

That led to the Reserve Bank censuring ANZ for failing to comply, and forcing it to use the “standardised approach” for calculating appropriate capital risk levels. This increased minimum capital held by the bank.

Deputy Governor Geoff Bascand raised strong concerns with the bank.

“ANZ’s directors have attested to compliance despite the approved model not being used since 2014. The fact that this issue was not identified for so long highlights a persistent weakness with ANZ’s assurance process,” Bascand said. 

Key had been asked on Monday whether Hisco’s departure had anything to do with the embarrassing censure from the Reserve Bank.

Key said that while the board took the issue “very seriously”, the capital adequacy issue was down to the poor performance of a junior staff member. 

“That was an issue where a person quite junior in the organisation made a call they thought they had authority, they didn’t have that [authority],” Key said. 

“The board believed it was getting the right advice because in writing it was advised that it was compliant,” he said.

Robertson said it was inappropriate to blame the staffer.

“That’s not an acceptable response, it’s the responsibility of the board and I’m sure Mr Key knows that,” Robertson said. 

"I take very seriously the censure that was given to the ANZ for failing to keep to their capital model. That is a relationship of trust between the RBNZ and a bank like any and I am extremely disappointed they didn’t keep to the arrangements they had,” he said. 

Robertson rejected calls for a full Royal Commission into banking conduct, along the lines of Australia’s Hayne Commission, as New Zealand had already had its Conduct and Culture Review undertaken jointly by the Reserve Bank and the Financial Markets Authority.

“We’ve already done the culture and conduct review that didn’t indicate the concerns raised in Australia but it did indicate some areas where banks needed to improve their performance,” Robertson said.

He did however note that phase II of the Reserve Bank Act Review would be looking at whether it had adequate tools to do its job as regulator. 

“One of the things I’ve asked for as we go through phase II is we look at case studies to make sure RBNZ has the tools they need,” Robertson said. 

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