The CEO of a major bank believes the current hype over bank capital overlooks the real “hot issue” that regulators will be increasingly targeting.
In an interview on ANZ Bluenotes, outgoing ANZ chief executive Mike Smith said “this obsession with capital as being the only defining measure for a strength of a bank isn't right”.
“Yes, you have to have a strong balance sheet – but that includes your liquidity, it includes your credit quality and capital of course is part of that,” Mr Smith said.
“But it's the people who manage it who most affect the bank and whether or not it's going to be strong or not.
“It's the behaviours of the people who actually work for the organisation and therefore that values-led culture is absolutely critical. You'll see regulators now really turning the tap up on this and it's going to become a more and more hot issue.”
Mr Smith said that the problems experienced during the GFC in Europe, the UK and US were around organisations that had lost touch with their culture and had lost touch with what was ethical behaviour within those organisations.
“There were only a handful of those frankly but they tarred the whole industry. We have to live with that and we have to try and make it better all the time,” he said.
Mr Smith will step down as CEO on 1 January 2016 after eight years in the role, to be replaced by current CFO Shayne Elliott.
Last month the major bank completed a share purchase plan, raising approximately $720 million of CET1 capital.