Winston Peters: I would have called for Sir John Key's resignation

Monday, 24 June 2019

Deputy Prime Minister and NZ First leader Winston Peters says Sir John Key's positions on both ANZ boards in New Zealand and Australia are a 'massive' conflict of interest.

Speaking to TVNZ, Peters said: 'I think it's wrong that Mr Key can be at the head of ANZ New Zealand and sit on the Australian equivalent as well.'

Changes to boost public confidence in the banking sector are in the pipeline, including an insurance scheme covering bank deposits up to $50,000. Prime Minister Jacinda Ardern says changes are needed to give greater protection to customers.

He went on to discuss the bank's Reserve Bank censure for failing to keep its capital risk modelling.

On May 17, the Reserve Bank censured ANZ New Zealand, stripping it of its right to calculate how much risk capital its required to hold due to 'a persistent failure in its controls and attestation process'.

Winston Peters said there were questions to be answered about ANZ and John Key's role on the board.

* The smiling assassin strikes: John Key pushes out David Hisco as ANZ CEO

* Finance minister says ANZ 'has questions to answer' about CEO departure**

That led to calls for board chairman Key's resignation from former BNZ chair Kerry McDonald, who said he was amazed at the limited penalty imposed on the bank.

'In my view … this failure indicates that the board was/is not competent and also raises serious questions about the bank's management and reinforces my concern with the competence of the boards of the banks generally,' McDonald wrote.

Key said at a press conference held last week to explain former chief executive officer's David Hisco's departure from the bank over an alleged 'mis-characterisation' of personal expenses, that the issue was created by a 'junior staffer'.

The Reserve Bank generally allows the large Australian-owned banks to calculate how much capital they need on the basis of the type of lending they have done.

Peters said Key had blamed the capital requirements mistake on a 'low, surrogate' inside the bank which he said was wrong.

'I think there are some serious questions that need to be answered … there is much more to be unearthed in my view.'

Simplicity founder Sam Stubbs has said there is a conflict for people serving on both the Australia and New Zealand boards of the big banks because the Australian boards need to generate money for their shareholders in Australia but the New Zealand businesses need to fight for New Zealand interests.

When asked if Key should stand down Peters said that wasn't his role, and it was a question for the Governor of the Reserve Bank.

But he went on to say if he was the governor, he would have asked for Key's resignation.

'The capital requirements are designed so we don't end up like, for example Greece or Portugal, where there are people lined up for kilometres down the street trying to get their money out because the banks don't have enough by way of reserve.'

Key was not immediately available for comment on Monday, and last week, as news of ANZ CEO David Hisco's resignation unfolded, he also largely refused to comment on his own tenure at the bank.

He had said the issue was created by a 'junior staffer'. It would have been inappropriate for him to resign as the board had been told in writing that the model was compliant.