Financial revelations may tighten regulatory regime

Venkat Raman

Although much of the details relating to ‘Panama Papers’ are yet to be released, the regulatory framework in almost countries would become more stringent, a top banker has said.

ASB Executive General Manager (Corporate Strategy) Grant Frear said that the world is yet to absorb the full ramifications of the ‘Panama Papers’ and the consequences that would follow, the most important of which would be the need for greater accountability, transparency and good governance.

“As all of us understand the extent to which these revelations will influence our actions, it seems obvious that more controls and checks and balances would become obligatory in the future,” he told Indian Newslink during an interview.

ASB_Logo_Y_on_B_SPOTLong-established institutions such as ASB are known for their traditional cautionary approach and increasing knowledge of financial breaches would intensify their resolve to reassess their risks.

Security first

Mr Frear said that as a public institution, the Bank is obliged to constantly evaluate its decisions on investments, corporate governance and other related matters to ensure that they are robust and remain within the acceptable standards of safety and security.

“ASB also has the obligation of ensuring that our customers are performing well and do not get into unnecessary financial stresses and strains. Risk Assessment and Management are two major areas of concern and concentration and they also challenge our ability to cope with the evolving trends,” he said.

Mr Frear joined ASB January 2014, bringing with him 12 years of experience as a Partner at Deloitte, where his role involved developing growth strategies and risk assessment. While he admires great strategies, he has more respect for those that can implement them.

“The world of business and technology is developing at pace, things that were once out of reach for many New Zealand businesses are now a reality. So to really take advantage of this, business needs to have a mind shift. Small is the new big – innovation is critical as the challenge shifts to how you can pull together the options that are now available to you. Well thought out strategies are great, the ability to execute is critical,” he said in his LinkedIn profile.

Significant changes

Mr Frear said that appropriate allocation of resources – money, time and efforts – to achieve results is as important as having in place systems, controls and procedures.

“Banking has undergone significant changes over the years, brought about by technology international developments and a number of other factors. Regulatory regimes are in place locally and internationally to protect the safety of the markets. While deregulation of markets has brought with it a number of risks, which in turn has necessitated stringent controls and measures,” he said.

Mr Frear said that customers may not always understand the complexity of the banking system but their safety and financial protection cannot be undermined. “Banks therefore have the duty of protecting their customers,” he said.

ASB is known for its restrained approach to market exposure and its risk management process is stated to be robust and sophisticated.

Such effective management enabled the Bank to weather through the Global Financial Crisis which affected the New Zealand economy in 2008 and 2009. The Bank worked closely with its customers to manage the crisis.

IMF Review

A Reserve Bank of New Zealand Bulletin said that the International Monetary Fund (IMF) is preparing to assess the way that financial institutions are prudentially regulated and supervised.

“New Zealand’s financial sector plays a very important role in supporting economic performance and the improvement in living standards for all New Zealanders. It is crucial that the various functions of the financial system such as allocation of funds from savers to borrowers, facilitating an efficient means of transacting, and mitigating economic risk are equally supported by a robust regulatory framework that is appropriate for New Zealand conditions,” the Bulletin said.

The IMF will examine how New Zealand’s financial institutions are prudentially regulated and supervised by RBNZ and how New Zealand’s capital markets and financial market conduct are regulated by the Financial Markets Authority (FMA).

Interesting environment

Describing the current banking environment as ‘interesting,’ Mr Frear said that financial stability is underscored by corporate and individual discipline, further ensured by the practices and procedures followed by banks.

“However, banks operate under increasing competition in a crowded market. Customers have more banking options today than ever before. This in itself poses a challenge to banks to retain customer confidence, meet their growing demands, increase market share and keep our risks to the minimum. ASB has a record for judicious management of its client’s needs and promoting their growth and progress. We also constantly remain conscious of our corporate, social and community responsibilities,” he said.


Grant Frear: Strategies for Growth

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