Scrutiny over Australian banks wrongdoing spill over to New Zealand

The regulator is talking with local lenders to ensure they are not caught up in Australia’s mess.

Bloomberg reports that New Zealand regulators have called on the heads of the country’s major lenders to provide evidence that they’re not engaged in the unethical practices of their Australian counterparts.

Australia's Royal Commission revealed that banks in Australia have been engaged in a decade of corporate wrongdoing which ranges from collecting fees from the accounts of dead people and profiteering.

Also read: CBA reveals loss of nearly 20 million bank account records

As the four biggest banks in New Zealand are units of Australian banks, regulators have expressed concern of the possible spillover effects brought to light by the inquiry.

"We’ve asked them to provide reassurances to us that they have scrubbed their business models, and they have a basis for being confident that those issues don’t exist here," Financial Markets Authority chief executive Rob Everett told Radio New Zealand, which first reported the news.

Banks, however, welcomed the tighter scrutiny. "We’re confident that we don’t have the same issues that they have in Australia," ANZ Bank New Zealand chief executive David Hisco said.

Here’s more from Bloomberg.