Prime Minister Jacinda Ardern has discussed how the Government can ensure the Reserve Bank 'lifts its game' after Finance Minister Grant Robertson called for an end to staff sales targets in a year's time.
Ms Ardern joined TVNZ's Breakfast this morning to talk about the bank conduct review and the 'regulatory gaps' in the Reserve Bank and the Financial Markets Authority (FMA).
Ms Ardern said, "Well, there's always the ability of government to regulate enforcement around these issues".
"The Reserve Bank and FMA have given us a little nod at where they think there are regulatory gaps, and so we've now received that as of yesterday, and we're equally waiting to see what's finally going to come out of Australia as well.
"[By] February next year, I believe, they will be giving their final report on the royal commission. We'll be going through that again to check that there are additional things that might need to be done within our banking context, too.
"But the Reserve Bank have already said to us and Government, 'Look, you know, your role is to close the gaps – the regulatory and enforcement gaps – where they exist.'"
The Prime Minister also discussed Kiwi banks' profit margins and how the Government can ensure some of it is invested back into the country after recent large profit announcements.
Yesterday, Westpac announced profit of over $1 billion.
She said, "So what we've had done by the Reserve Bank and the FMA – that really looks at conduct, that looks at how they're managing relationships with consumers and that the right protections are in place and they’re not incentivised to act or behave badly".
"I think, what we're probably seeing with these profits – I mean, that's probably more of an issue of competition, but, you know, banks here rely on social license. They rely on consumers actually having a bit of faith in those institutions, and I'm sure that they'll be looking at some of those profits relative to what’s going on in the international environment and, I would hope, making sure that they are constantly mindful of keeping their social license."
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