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Jane Diplock - Source: TVNZ -
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The only people who'll lament the end of Jane Diplock's reign as the head of the financial markets watchdog when she steps down at the end of this month are the crooks "sad to see the end of an era of easy pickings", the Shareholders Association says.
Whatever else she might have done or achieved in her decade at the helm, the finance company meltdown she did not prevent - and says she could not prevent - is undoubtedly what will stand out in the minds of most.
But Jane Diplock stands by her record. This week, as her last day on the job looms, she came on AMP Business and I attempted to get her to answer her critics.
Was she asleep at the wheel as we witnessed the almost complete collapse of the mezzanine finance company sector and the loss of billions of dollars of investors' money? Or was she really powerless the stop it, hamstrung by a thoroughly inadequate financial system?
She, of course, is more keen on the latter explanation. She says she did what she could with the tools she had, but those tools were blunt and the toolset incomplete. "Opportunists took advantage of a regulatory desert... The securities commission did not have a hook to go in and analyse what was happening inside those companies until after they had failed," she told me.
Many commentators have taken issue with that. Take, for example, the powers the Securities Commission has exercised just this year in freezing the assets of Hanover's Mark Hotchin and the injunction it sought and won against Bernard Whimp and his low-ball share offers. Could they not have been this proactive during the finance company debacle?
No, is the short answer from Diplock. "I would open the newspaper and see people baying for blood, 'Why isn't the Securities Commission doing something?' and at the same time in my other hand I would have closely argued legal advice from the best QCs in New Zealand saying there was nothing we could do and I found it personally very frustrating."
Frustrating, perhaps, but did she agitate enough for change in that regulatory desert? Ten years is enough time to affect some serious change, isn't it? Yes and yes, she told me. But it all just moves so slowly. It took from 2004 to 2011 to get financial advisers regulated, Diplock says.
She lays the blame at a rather nondescript doorstep. "I think that the anti-regulation mantra that many people in this country have embraced has done New Zealand a disservice."
If she'd had the tools that will be available to the new body, the Financial Markets Authority, could disaster have been averted? Diplock believes they would have gone a long way.
Which brings us to what she believes her legacy to be - the FMA itself. "Finally, New Zealand policymakers and business understand for a modern developed capital market you need a properly resourced, properly engaged and tooled-up regulator to be able to take action."
Diplock believes there has been some "rewriting of history" along the way.
It's often said of history that it's written by the winner, but winners are thin on the ground in the collapse of the finance company sector. So, I think her professional history is likely to be written, fairly or not, by those who believe she didn't do right by them.
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Post new commentnztifosi said on 2011-06-03 @ 17:26 NZDT: Report abusive post
Just when my family was making headway financially the government chose to cut tax and put GST up. At the same time funding to the school I work at was cut resulting in an hours cut for me. Result? We are now worse off than ever before! And now we are supposed to spend, save, donate to Canterbury and every other charity as if the current situation were the working man's fault. It is the speculaters and the financiers along with the government who got us into this mess! -now they can get us out!
deltics said on 2011-05-19 @ 12:38 NZDT: Report abusive post
Saving isn't what NZ needs right now, it needs to pay off it's debt AND increase spending. Money paid into KiwiSaver doesn't reduce our current debts and doesn't circulate around or stimulate the economy! So it actually makes a lot of sense for the government to reduce the incentives to pay into KiwiSaver whilst emphasising the need to be more prudent in our spending (paying down debt) without closing our purse strings too tightly in the process.
ceejaygee said on 2011-05-15 @ 12:33 NZDT: Report abusive post
i currently pay 4% into kiwi saver i would like to pay 6% unfortunately there is no provision for that hopefully the govt have thought about that. as to the tax credit cut not a clever idea, maybe they could make it totally tax free then we could really save for our retirement then they could cut the tax credit altogether
Danthetaxpayer said on 2011-05-14 @ 19:10 NZDT: Report abusive post
I would also like to ask how is it retirement savings are even a priority when we fail so badly as a country to take care of our children? Children who are meant to be our future taxpayers helping to fund future NZ Super? Children who are often neglected, illiterate & who struggle to get the medical assistance they need due to health care shortages and whose families often have to fundraise? Why are these things not a priority?
Danthetaxpayer said on 2011-05-14 @ 19:07 NZDT: Report abusive post
I'm confused: how is it saving when most of the 1.67 odd million people with Kiwisaver are probably receiving some kind of government assistance. Assistance is for hardship and to meet basic needs - food, clothing, shelter only. If they have enough spare to put into Kiwisaver which then gets matched by more taxpayer funds earned by the hard work of others, then isn't this the horse before the cart? Further, how can it truly be savings when we are borrowing $300 million each week?