As a country we should expect better. For customers of this country's largest bank who pay through their fees and charges, there will be disappointment. Staff, understandably, will feel let down.
A positive gloss would have it that Mr Hisco had an oral agreement with the previous group chief executive to spend money on personal use of chauffer-driven cars. The only fault was the ''lack of transparency'', a technical and recording issue rather than one of integrity.
As for storage of wine in Australia, it was a relatively small cost and fair enough
for an Australian working in
New Zealand.
But expenses and their sign-off should be a matter for the board and the chairman, not an earlier chief executive. Are chief executives laws unto themselves?
Bank chairman Sir John Key says Mr Hisco has been ''trustworthy'' throughout his time at the bank, and the issue was with record keeping, which was not transparent, and in some cases, expenses were characterised as business when they were clearly personal.
This does not wash and does not seem fair. It would appear Mr Hisco, already on a salary of about $3.8million a year ($73,000 a week) - not to mention many millions of dollars in share options - felt entitled enough to claim those extra expenses. Not only that, but the board and its chairman failed to notice. Why had this not been picked up earlier, and why did it take an alert from the parent bank in Australia and an investigation by the bank's integrity team to raise the alarm?
If this has been going on, then what about other failures?
As it happens, ANZ in New Zealand was censured last month for ''persistent failure'' to properly calculate risk. The Reserve Bank revoked the bank's accreditation to model its operational risk capital requirements. It was ordered to increase the capital it holds as a safety net to absorb potential losses by 60% to $760million.
The banking industry as a whole has been criticised for sales incentives created by pay structures, a point made also after a review last year by the Financial Markets Authority and Reserve Bank. While none of the shocking and disgraceful practices revealed in the Australian Royal Commission inquiry into banks came to light, questions were asked about why New Zealand subsidiaries would be that different from their Australian parents.
No wonder calls for a full inquiry into New Zealand's banks are being renewed.
This latest incident will not help the banks in their intense lobbying and efforts to thwart a Reserve Bank plan to increase bank capital and therefore bank security. New Zealand taxpayers do not want to be left holding a screaming baby should an economic crisis sweep the world, house prices crash and the banks falter.
The threat of bankruptcy is a break on imprudence and extreme risk and underpins decisions in this capitalist world. But, as evidenced in the United States during the Global Financial Crisis of 2007-08, the largest banks would be too big and too crucial to be allowed to collapse. They would be bailed out. The fundamental risk is, unfairly, with governments and their taxpayers.
Australia and New Zealand are, despite reservations, characterised by strong banks. Often, too, they provide efficient and effective service. But we want these institutions to live up to the adage ''as safe as a bank''. We need to be able to trust them. And that requires integrity right from the top.
