Westpac chief executive Brian Hartzer, appearing in front of the House of Representatives economics committee for the first time since the banking royal commission began, was forced to admit he was wrong for opposing it.Hartzer was also forced to admit Westpac was the previously unnamed bank mentioned in an ACCC report into mortgage pricing after the 0.6 per cent bank levy was introduced via the 2017 federal budget. He conceded that Westpac had looked at ways of passing on the bank levy or lowered cosets to mitigate its effects - that is, passing the levy onto customers, or cutting bank staff bonuses, etc.He said these measures might have been mentioned as alternatives but were not implemented. He then went on to tell the parliamentary committee that tougher regulation alone wouldn't solve the risk of poor conduct at banks - view held by Commissioner Kenneth Hayne."New regulations and tougher sanctions alone are not going to solve the risk of poor conduct," Hartzer told the committee."All of us want a strong banking system that delivers good outcomes for customers and the economy as a whole."To achieve this, we need our bankers to exercise good judgment in a world that is often grey".Here he agreed with the committee that often bankers were too removed from reality and fell into using a tick-the-box approach, when, as he noted: "they should be more focused on outcomes rather than inputs".Nevertheless, Hartzer conceded that the structure of pay for senior execs is linked to the profitability of the business, and that about a dozen of Westpac's senior execs were subject to the new BEAR provisions - essentially Hartzer, his direct reports and the group treasurer."We have to demonstrate good performance along the way - the dividends over the next three years [after an investor buys shares in Westpac] equate to about 18 per cent of what they've paid, so there is 80 per cent of the price that is subject to uncertainty."Another contentious issue for Hartzer to deal with was the retention of the BT wealth advice arm. He defended his bank's decision to retain much of the BT business."The issues we've seen in financial planning have not been limited to banks, so it's not necessarily bank ownership that has caused the issues in financial planning. The conflict existed when there were financial planners selling products that their organisation also manufactured," Hartzer asserted."BT investment management sold products which were distributed by the bank's financial advisers, which is why Westpac sold that part of the BT business," he said.Hartzer told the panel that the part of BT that was sold related to manufacture of financial products, so the BT financial advisers had no incentives for conflict of interest, although he conceded that the remaining businesses that Westpac still holds have potential to cause further conflicts."In the long run, whether the economics of financial planning stack up is something we'll need to decide."He said Westpac was not getting entirely out of non-bank businesses, however, as his customers have long-term