Australian Politics Forum

Banking inquiry: What have we learnt and where to from here?

The banking inquiry has laid bare a litany of examples of bad behaviour, with each of the big four plagued by their own separate scandals.

But we've actually learnt very little this week.

We heard of numerous incidents involving many tens of millions of dollars in "errors", unscrupulous financial advice, forged documents and a number of examples of "rockets and feathers" (interest rates shooting up like rockets when the RBA raises the official rate and falling slowly, like feathers, when the cash rate falls).

Almost all of these just happen to feed into the banks' record profits.

We also heard about scores of financial advisors (about 1 in 40 for ANZ and NAB) being unscrupulous, sacked or referred to the corporate regulator ASIC (but no managers or executives have been given marching orders).

And we heard of outrageous fees, enormous profit margins and whopping executive salaries.

But none of this is really new.

The most jaw-dropping news this week was revealed by ABC's 7.30 on Monday night — CBA's insurance arm ignoring a coroner's report and death certificate to avoid paying out a life insurance claim.

The biggest news from inside the inquiry was ANZ's revelation it was considering following NAB and stopping donations to the major political parties — if anything a display of the banks (not their political inquisitors) taking the moral high-ground.

Was it worth it?

The Government wouldn't admit it, but the inquiry was partly a show trial.

After all, it wasn't the long list of scandals that prompted the inquiry, but rather the most recent decision by the banks not to pass on the RBA rate cut in full. (It was also aimed at staving off Labor's calls for a royal commission.)

So the inquiry was set up, in part, to make all of us feel better by watching the big bank bosses squirm, and at times it delivered.

As the AFR's Laura Tingle tweeted: "Wouldn't it be more time efficient to just set up some stocks outside Parliament House?"

Each of the bosses offered separate mea culpas. The most striking admission came from ANZ boss Shayne Elliott, who said: "I think as an industry we've lost touch with our customers. We've become too internally focused and lost sight."

There were also a few awkward moments, as the chief executives revealed their salaries (millions) against those of their tellers (about $50,000).

But overwhelmingly, the chief executives proved why they earn those big bucks. The PR agencies that have been coaching them would have been chuffed.

Despite the best efforts of the 10 inquisitors, all skilful politicians, most trained lawyers, and one a former Commonwealth Public Prosecutor, the chief executives generally displayed the perfect balance of frankness, contrition and strength.

There were no killer blows.

So what will actually come of all this?

It was clear from chair David Coleman's questions the Government had reform in mind, even before the inquiry got underway.

The most significant is a banking tribunal. This would enable aggrieved customers to take complaints directly to an independent umpire, without having to hire lawyers and go up against the banks in the courts.

Interestingly, each of the bank bosses welcomed the idea, and even offered to help pay for the establishment of such a tribunal. It was almost as if they were fully briefed and their responses carefully coordinated.

The second reform would make it easier to switch banks, just like porting a mobile phone number. ASIC would be given powers to force banks to reveal the financial history of customers who wanted to go elsewhere, to make the process hassle-free.

The third would be encouraging (forcing?) banks to provide "tracking" variable mortgage accounts, that would move in line with the Reserve Bank.

The chief executives were generally sceptical, pointing out they'd have to factor in risk, meaning the rates would be significantly less attractive.

Do we need a royal commission?

Labor says yes — and many Australians would agree.

With each of the chief executives only grilled for three hours, the committee members had just 20 minutes to ask questions and most claimed there were many more left unasked and unanswered.

Indeed, the chief executives may be called to appear again before too long.

The very fact there were no killer blows is proof, according to some in Labor, that an inquiry with teeth is what's needed. (Conveniently, if there had been more explosive evidence, the case for a royal commission would have been even stronger.)

Bill Shorten said today: "If all of these banks are saying we stuffed up, we got it wrong, we have caused problems for our customers, haven't they just made the final argument in favour of a banking royal commission?"

Proponents of a royal commission have long pointed to the culture of incentive bonuses for bank staff who push financial products, sometimes to the detriment of customers.

But this inquiry revealed they actually get much less than you may have thought for sales and referrals. It's usually well under 5 per cent of their total pay.

There was also evidence the banks really are trying to improve, with considerable success.

Nonetheless, a royal commission would no-doubt uncover much more bad behaviour and drive much more cultural change.

(cont.)

As the Government points out, it would also cost hundreds of millions of dollars and drag on for years.

The key question is: Would a royal commission undermine the strength of our banks, and hence our economy?

And would a royal commission actually stop the banks being banks?

http://www.abc.net.au/news/2016-10-06/banking-inquiry-what-have-we-learnt/7910414

Bring on a royal commission and stop wasting money on side show alley.

[quote author=John_Smith link=1475742438/2#2 date=1475742540]Bring on a royal commission and stop wasting money on side show alley.[/quote

Hear Hear

where are all the liberal monkeys to tell us how great this has been . ::)

John Smith wrote on Oct 6^th, 2016 at 9:30pm:

where are all the liberal monkeys to tell us how great this has been . ::)

One telling question put to one of these Bankers (against the background of a meeting they had with Morrison some time ago, and before this charade was finally set up) went along the lines of ~ "Was the possibility of a Royal Commission raised if you did not support the proposed charade?" The answer was, "I don't think so."

Farce.

Your headline was always a foregone conclusion - but there seems to be some meat to be derived from the proceedings... a little ammunition for the dissident community out there... the REAL Australians who know the difference.

an enquiry into successfully run , profitable businesses.

Not really a dud. More of a learning experience for our pollies. A chance to glean some pearls of wisdom from superior men

“superior men” ::) who condone corrupt behavior. Good old horse boy still talking horses doovers!

Jovial Monk wrote on Oct 7^th, 2016 at 7:02am:

“superior men” ::) who condone corrupt behavior. Good old horse boy still talking horses doovers!

corruption ? meh....i'd take a touch of corruption over a truck load of stupidity any day

Banking Enquiry a DUD

I disagree. I have been informed by my close contacts in Canberra that all of the bank CEOs have spent sleepless nights worrying about the course of the investigation of banking culture. The CEOs have been given the number of LifeLine and they have been placed on suicide watch.

Banking culture is to be profitable, competitive, get rid of deadwood, concentrate on core skills, be innovative, entrepreneurial, look after the cream customers, give the scrubs a hard time as scrubs dont contribute value to your business.

all in all, the banks run the way the singapore government runs.

They apply all the principles of success.

failure is the norm for the dumb scrub....just ask wayne swan, jo hockey and scott morrison. they are not fit to check the air pressure in the banking CEO's tyres

aquascoot wrote on Oct 7^th, 2016 at 7:30am:

meh....i'd take a touch of corruption over a truck load of stupidity any day

of course you would ... you already have more than enough stupidity to last you 5 lifetimes.

John Smith wrote on Oct 7^th, 2016 at 8:21am:

aquascoot wrote on Oct 7^th, 2016 at 7:30am:

meh....i'd take a touch of corruption over a truck load of stupidity any day

of course you would ... you already have more than enough stupidity to last you 5 lifetimes.

;D ;D ;D ;D ;D ;D ;D ;D ;D ;D ;D ;D ;D

John Smith wrote on Oct 7^th, 2016 at 8:21am:

aquascoot wrote on Oct 7^th, 2016 at 7:30am:

meh....i'd take a touch of corruption over a truck load of stupidity any day

of course you would ... you already have more than enough stupidity to last you 5 lifetimes.

the beta horse will often be quite brave when he is in another paddock (or posting on the internet).
but the alpha is confident in his own righteous position and carries on, up the narrow road to success.
His companions on this incredible journey include our fine banking CEO's.

the scrubby politicians (beta males) try to impede our climb up the narrow road to success. We just blow on by, we are indifferent to their whining and complaining. The senate can write a cry baby story about some manufactured problem. We shall chuckle and use the report as kindling to light our campfire where we will sit around and enjoy the fruits of our journey

aquascoot wrote on Oct 7^th, 2016 at 8:35am:

John Smith wrote on Oct 7^th, 2016 at 8:21am:

aquascoot wrote on Oct 7^th, 2016 at 7:30am:

meh....i'd take a touch of corruption over a truck load of stupidity any day

of course you would ... you already have more than enough stupidity to last you 5 lifetimes.

https://www.youtube.com/watch?v=jMyL0HdXPuc

Imparting some more wisdom Scoot :D :D

The Lefties reckon a Bank RC run by Malcolm would be like a Union corruption RC run by Shorty.

A Federal ICAC would go better.... and a Bank RC run by Malcolm would be as useful as a Union RC run by Malcolm and Tony - "I can't find nuffin' but thanks for all the cash."

aquascoot wrote on Oct 7^th, 2016 at 8:35am:

John Smith wrote on Oct 7^th, 2016 at 8:21am:

aquascoot wrote on Oct 7^th, 2016 at 7:30am:

meh....i'd take a touch of corruption over a truck load of stupidity any day

of course you would ... you already have more than enough stupidity to last you 5 lifetimes.

you are confused, you think you're a horse but you're really a jackass

We need an RC in to banks with broad terms of reference ,now .

juliar wrote on Oct 7^th, 2016 at 8:39am:

The Lefties reckon a Bank RC run by Malcolm would be like a Union corruption RC run by Shorty.

Unions are like 50 kg of rocks in your back pack as you climb the narrow road to success.

Fine , successful bankers are like great partners who help you climb, they are like sherpas , making your journey easier. Why would we enquire into these fine sherpas. We should be falling to our knees , thanking them for running a world class financial system

aquascoot wrote on Oct 7^th, 2016 at 8:58am:

juliar wrote on Oct 7^th, 2016 at 8:39am:

The Lefties reckon a Bank RC run by Malcolm would be like a Union corruption RC run by Shorty.

Unions are like 50 kg of rocks in your back pack as you climb the narrow road to success.

Fine , successful bankers are like great partners who fleece you as you climb, they are like sherpas , picking pockets while pretending to make your load lighter as you make your journey easier. Why would we enquire into these fine sherpas. We should be falling to our knees , thanking them for running a world class financial system

fixed it for you

John Smith wrote on Oct 7^th, 2016 at 9:00am:

aquascoot wrote on Oct 7^th, 2016 at 8:58am:

juliar wrote on Oct 7^th, 2016 at 8:39am:

The Lefties reckon a Bank RC run by Malcolm would be like a Union corruption RC run by Shorty.

fixed it for you

The bankers in lehman brothers, fannie may , the bank of scotland, the bank of ireland.....these bankers CAUSED the GFC and were bailed out by taxpayers.

our banks did none of this.
they pay amazing dividends which have been responsible for a lot of the good returns to Superannuation funds (held by scrubby citizens).

and for this, we have an enquiry by the jealous losers, based solely on the fact that the jealous losers want to cut down every successful enterprise because success is hated by the ego of the loser.
he hates success because it reveals his own mediocre accomplishments and he must confront what a loser he is. this he will never do. far easier to hate the successful guy then look at yourself in the mirror and reflact on your own mediocrity. myself and the bankers get it.
Its called 'lower consciousness".
Its a primitive animal type thinking, probably your brain has hyena DNA in it which is very active ;)

you might be prepared to overlook corruption and banks ripping of customers because they make a profit, but I'm not. The instigators of these rorts should be jailed. I'd bet you wouldn't be so happy to overlook it if it was your life savings they'd stolen.

aquascoot wrote on Oct 7^th, 2016 at 7:30am:

Jovial Monk wrote on Oct 7^th, 2016 at 7:02am:

“superior men” ::)anc who condone corrupt behavior. Good old horse boy still talking horses doovers!

corruption ? meh....i'd take a touch of corruption over a truck load of stupidity any day

Touch of corruption? System–wide corruption more like!

Even a coroner’s report on cause of death did not result in a payout on a life insurance policy! Then there are the financial advisors etc etc etc.

The industry funds way outperform retail funds like those run by the banks—no corruption could be one reason.

The bank CEO look like a slimy pack of dimwits!

If the banks are successful (are they, needed govt guarantees in the GFC) it is the bank structure here and strict financial/fiduciary regulations.

On a lighter note.....

"A well known financier told me that it was deeply unfair that 99% of British bankers were giving the decent 1% a bad name"
- John Cleese ‏@JohnCleese Oct 7, 2016 Tweets & replies Media

Australian Politics Forum
http://www.ozpolitic.com/forum/YaBB.pl General Discussion >> Federal Politics >> Banking Enquiry a DUD http://www.ozpolitic.com/forum/YaBB.pl?num=1475742438 Message started by John Smith on Oct 6^th, 2016 at 6:27pm