Latest / Best of Business / Jenee Tibshraeny: NZ Herald Wellington business editor on Craig Stobo resigning from the FMA after conduct review

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Jenee Tibshraeny: NZ Herald Wellington business editor on Craig Stobo resigning from the FMA after conduct review · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks'd be follow
• 0:12
  Speaker 1: this and our wide range of podcasts now on iHeartRadio
• 0:16
  Speaker 1: right now. There has been a fair bit of debate
• 0:18
  Speaker 1: merger emerging over whether the FMA chair Craig Stobo should
• 0:22
  Speaker 1: have lost his job over his lack of political neutrality.
• 0:25
  Speaker 1: The Herald's Wellington business editor Genative Trainee is with us
• 0:27
  Speaker 1: on this hij name hi. Heever, there is a long
• 0:30
  Speaker 1: list of stuff that he's apparently done wrong. What do
• 0:33
  Speaker 1: you think it is that's tipped him in the end?
• 0:36
  Speaker 2: You're right, there is a long list, and I think
• 0:38
  Speaker 2: there are The list shows that Craig Stobo appeared well intended,
• 0:44
  Speaker 2: he had good intentions, but there's a lot of misjudgments.
• 0:48
  Speaker 2: So ultimately the King's Council recommended he be removed from
• 0:53
  Speaker 2: that role because of his political statements. This was in
• 0:57
  Speaker 2: various media outlets. For example, he told The Herald that
• 1:00
  Speaker 2: the previous Labor lead government had atrocious policies. He also
• 1:04
  Speaker 2: made a personal submission to Parliament on the Treaty Principal's
• 1:10
  Speaker 2: Bill you know, and questioned one of the climate disclosures
• 1:14
  Speaker 2: regime that the mandatory nature of that which is a
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  Speaker 2: regime that the FMA oversees. So that was the real issue.
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  Speaker 2: But there were a number of aggravating factors that I
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  Speaker 2: just think SI suggested he exercised a lot of poor judgment.
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  Speaker 1: Okay, so even though he made this the submission to
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  Speaker 1: Parliament on the Treaty Principal's Bill in his private capacity,
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  Speaker 1: is he not entitled to do that if he holds
• 1:38
  Speaker 1: a political public role.
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  Speaker 2: I think, you know, it's a different thing if it
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  Speaker 2: was just the one isolated thing. But the number of
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  Speaker 2: political comments that there was a lot, And you know,
• 1:48
  Speaker 2: the point that the k C made was that there's
• 1:51
  Speaker 2: such a high profile role that he's in as a
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  Speaker 2: chairman of the financial Regulator that you know, can you
• 1:58
  Speaker 2: really say stuff like that in your personal capacity when
• 2:01
  Speaker 2: you're in a job that is so much in the spotlight.
• 2:04
  Speaker 2: The thing is is that you know, Craig Stobra needs
• 2:09
  Speaker 2: to be able to work with governments of various stripes.
• 2:12
  Speaker 2: It's not a political role. And you know, when you
• 2:15
  Speaker 2: are the conduct regulator fma's conduct regulator and you're telling
• 2:20
  Speaker 2: other banks and things like that that they have to
• 2:23
  Speaker 2: conduct themselves in a certain way. Dot their i's cross,
• 2:26
  Speaker 2: their t's, however, silly those institutions think it might be.
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  Speaker 2: I think it's important in terms of your credibility that
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  Speaker 2: you also do that in terms of the way you
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  Speaker 2: carry yourself. It's a credibility issue more than a free
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  Speaker 2: speech issue in my opinion.
• 2:40
  Speaker 1: I tell you what I found really weird is why
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  Speaker 1: did he decline having a credit check done?
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  Speaker 2: Yeah, you know, that's the thing. So it sounds like
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  Speaker 2: it's a normal thing for people in those jobs to
• 2:49
  Speaker 2: have a credit check done, and he just didn't want to.
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  Speaker 2: My reading of it is that it's a principal thing.
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  Speaker 2: He must have thought, well, that's silly, that's not necessary
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  Speaker 2: for this job. But to me, it sort of does
• 3:01
  Speaker 2: stand out as a bit of a red flag at
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  Speaker 2: the beginning of the process that this is not someone
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  Speaker 2: who likes to conform to things, you know, just for
• 3:09
  Speaker 2: the sake of it. That's good in some ways because
• 3:12
  Speaker 2: it shows he's thinking for himself. And you know, arguably
• 3:15
  Speaker 2: the FMA does need a bit of a shakeup. Some
• 3:17
  Speaker 2: of the sources I've spoken to have said, you know,
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  Speaker 2: it's lose lost some of its credibility. So maybe a
• 3:22
  Speaker 2: reformer like Craig Stowbo was a good thing, but it
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  Speaker 2: is tough when you're a regulator and you're asking you've
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  Speaker 2: run ouse to dot the i's and cross their t's,
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  Speaker 2: however ridiculous they might think it is, and if you're
• 3:33
  Speaker 2: not doing it, a bit of a red flag.
• 3:35
  Speaker 1: Hey, now, on this A and Z class action and
• 3:37
  Speaker 1: the ruling against them, do we have any idea how
• 3:39
  Speaker 1: much A and Z will have to cough up?
• 3:42
  Speaker 2: A and Z said that the maximum it reckons is
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  Speaker 2: it could be one hundred and twenty five million dollars.
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  Speaker 2: So that's a material enough sum of money even for
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  Speaker 2: A and Z. It's had to report that to the
• 3:53
  Speaker 2: Stock exchange. But it really does depend on how the
• 3:57
  Speaker 2: ruling is applied to the seventeen thousand customers that could
• 4:03
  Speaker 2: be affected, and it also depends on whether A and
• 4:06
  Speaker 2: Z appeals the judge. So listeners might recall we've talked
• 4:11
  Speaker 2: about this over the you know, recently, basically a big
• 4:14
  Speaker 2: class action against A and Z because in the mid
• 4:18
  Speaker 2: to late twenty tens, A and Z had a coding
• 4:21
  Speaker 2: error in one of its loan calculators and people paid
• 4:25
  Speaker 2: the wrong amount of interest. A and Z did sort
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  Speaker 2: it out with them, actually paid them thirty five million dollars,
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  Speaker 2: but under the way the laws written for that time period,
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  Speaker 2: A and Z was compelled to reimburse the borrowers all
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  Speaker 2: the interest costs for the time of the breach. Ain
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  Speaker 2: Z says that is an entirely disproportionate penalty. But that's
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  Speaker 2: and the laws have been changed since. But you know,
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  Speaker 2: that's how you get to such a big sum one
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  Speaker 2: hundred and twenty five million dollars.
• 4:54
  Speaker 1: Thanks very much, training, I love watching maths in action.
• 4:59
  Speaker 1: New Zealand Herald Business editor down in Wellington. It's for
• 5:02
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