Bayly Andrew; Salesa JennyANDREW BAYLY (National—Port Waikato): Thank you Madam Chair and I welcome the introductory comments by Mr Robertson. I thought we were going to have to rely on Shanan Halbert for some commentary on this section but we were holding our breath. We were holding our breath Mr—Stuart Smith: You can see the disappointment in his face.ANDREW BAYLY: Yes. So what I wanted to talk about is clause 159 which did occupy the committee's time quite significantly as Mr Robertson highlighted. This is the defences for person that contravenes prudential obligation" and in plain terms this is about what is the liability particularly for directors or senior management teams in terms of meeting the requirements and the ability to rely on other people within an organisation to provide the information. I think the background to this is—personally I had a concern that we were running the risk with all the liability and the fines etc. that if someone in a large organisation didn't have some form of protection inevitably what would end up occurring is that particularly directors would end up having to do their own due diligence and to make sure that for instance the bank was providing the right information to the Reserve Bank and the forms that were required and if there were errors both in some of the figures or the way it was presented potentially could give rise to a liability for that particular individual. The mere threat of that especially when it was overlaid with significant fines as the Minister has just highlighted meant that progressively we may end up getting to the stage where already the regulation and regulatory oversight of banks is very significant and we will end up possibly having people who are not prepared to go on boards of banks and other regulated financial institutions that are covered by this bill. That would be a really bad outcome and I think it's slightly concerning that The Hongkong and Shanghai Banking Corporation has just recently pulled out of New Zealand. And one of the specific stated reasons for departing New Zealand and giving up its operations here is the degree of regulation—one of the explicit reasons given not the only reason but it was an explicit reason. I think we've got to be mindful in New Zealand that we strike the right balance between adequate regulation and one where we're becoming overzealous and uncontrolled and actually stifling competition stifling innovation but probably more importantly over time is actually stifling the appointment of good people who may want to be part of these organisations but who look at their personal risk and say "Look I don't want to be part of this because I cannot manage this risk adequately". Clause 159 does deal with that by providing a defence for someone that if a contravention which in terms of provision of information to the Reserve Bank "was due to reasonable reliance on information provided by another person other than a director an employee or an agent of A"—"It is also a defence for A to prove that—(a) the contravention was due to the conduct of another person"—or an accident or some other cause beyond the control of A.So what we sought to introduce in this section is really some mitigating factors because we do not want boards and directors of our large banks and even large deposit takers having to get—coming to a view that they need to do all this work. So this is a way of dealing with it. I think hopefully we've struck a balance in terms of a defence. But I think as I said before we've got to be mindful that we do strike an adequate balance because that's such an important part of our ecosystem—to have good strong financial institutions but at the same time we are promoting competition and innovation. So I'd be keen on what the Minister's view on it is on those changes and obviously he was supportive of them but it's a very important aspect I think. It's one of the most crucial aspects of this bill in terms of striking the right balance.CHAIRPERSON (Hon Jenny Salesa): The question is that the Minister's amendments to Part 5 set out on Supplementary Order Paper 361 be agreed to.Amendments agreed to.Part 5 as amended agreed to."