In 2008 when the banking sector was reeling from the effects of 32 separate New Zealand financial companies imploding, and much larger implosions happening in the United States, there were calls for bankers to be tried for fraud and jailed. United States President Barak Obama campaigned on banking reform, which he then got Senator Elizabeth Warren to enact. Democrats and the little man applauded, but the least repentant banking corporates cried foul. The rest of the world was cautiously optimistic.
Ten years later against a linger backdrop of economic uncertainty, with many of the factors that caused the 2006-2009 meltdown, it is New Zealand’s turn to question our banking sector. With A.N.Z.’s practices under the spot light how many other banks have questionable goings on in their back offices?
I agree with Sam Stubbs, who has called for a banking sector Royal Commission of Inquiry. The extent to which Mr Hisco appears to be out of touch with the rank and file employees such as the Branch Managers, the Tellers and so forth who are the public face of A.N.Z. is quite telling. Also notable is how the Chair of A.N.Z. and former Prime Minister John Key appears to think that Mr Hisco has been properly held to account and that the penalties he has accrued are somehow sufficient considering what he has done.
Mr Key denies it has had anything to do with the dressing down that A.N.Z. was handed by the Reserve Bank for not having enough capital in May. He said that Mr Hisco would take responsibility for it if he were in a position to do so.
This idea of a major bank not having enough in capital in the event of an emergency, I think quite a few people inside and outside of A.N.Z. and indeed the banking sector would find quite troubling. It suggests to me at a quite basic level in the same way a ship at sea wants to be sure that it has enough fuel to get back to port, someone or some several people who had significant monitoring responsibilities were somehow not doing their job.
I imagine that A.N.Z. rank and file employees would be quite angry with how the matter has been handled. Yes they might not have had the same entitlements and responsibilities as Mr Hisco, but I am sure that if any of them did that they would be fired point blank and not be entitled to any financial compensation, or other supportive measures. Mr Hisco, whilst relinquishing about $6.4 million in equity will be paid a full 12 months salary, which is dramatically more than the $0 that most people get paid when they get fired.
Yes, Mr Key and his Board might think they have done the right thing in letting Mr HIsco go, and in that respect, yes they have. However the $2 million golden handshake, the fact that there might be much more than what has been let on that he misappropriated all point to a bigger story than either Mr Key was willing to tell the media about, and/or which Mr Hisco was willing to tell Mr Key and the Board of A.N.Z. about.
It is hard not to feel sorry for the ordinary staff member at A.N.Z. just trying to do their job as best as they can to the standards expected of them, who must feel like they have been ratted on from the highest echelons in the company. They surely would not have anything like what Mr Hisco got to support them in their post A.N.Z. career, which by my guess on the current estimated income for a bank teller would take them about 40-50 years to earn.