No financial sector untouched

David Murray has delivered his Financial Systems Inquiry (FSI) report.

No financial sector untouched

Regulation

The Australian Security and Investment Commission (ASIC) needs to be stronger with greater powers to tackle breaches in regulation. This should be funded by fees and levies paid by those in the industry, as is the case with the Australian Prudential Regulation Authority (APRA). A further recommendation is that there should be a new financial regulation assessment board to advise the government on the performance of regulators.

Insurance

Consumers need more guidance about the level of cover required to replace income and contents following an insurance event. If insurance agencies fail to provide such transparent guidance, then the Government should look to introduce new laws which automatically provide this information to consumers when they are renewing or purchasing a policy.

While the FSI recommendations will ultimately benefit the majority of Australians, the big banks, financial institutions and retailers are all set to take a hit. Steven Münchenberg, chief of the Australian Bankers’ Association, said “The question we, and the government, must ask on each of these recommendations is simply, does it help or hinder our future economic growth? A careful analysis of each recommendation on this basis is now needed”.


Read more at:

SMH.com.au

The Australian

Businessinsider.com.au

Do you think the Financial Services Inquiry goes far enough? Are there are aspects which concern you? Or do you feel consumers will benefit in the long run.

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    COMMENTS

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    nan
    8th Dec 2014
    10:20am
    Not before time.
    MICK
    8th Dec 2014
    10:47am
    The problem with banks is not just fees but rather that they 'invent' new money via an accounting fraud. If people knew how little equity banks actually had and how vulnerable they were they'd probably put their money under the bed.
    Falling house prices or a significant world shock are the Achilles Heel of the banking system. Last in borrowers who have borrowed 95%+ and leave their keys on the kitchen table in a falling real estate market would see our banks end up like the US banks, some of whom went broke and others whose share price dropped by 90%.
    The other issue people need to understand is that legislation has been enacted IN AUSTRALIA so that the big banks are allowed to steal your deposit money should they fall on hard times. APRA is responsible for this and one has to see the fingerprints of the big 4 all over this dishonest piece of legislation. The public has not been informed about this other than via a couple of side comments which were not up for debate but this has all been put in place to protect the bank, not you. But whilst the party goes on there should be no problems.
    Grateful
    8th Dec 2014
    9:11pm
    And Mick, what about the double whammy if house prices drop when SMSFs have borrowed on their taxpayer subsidized super which is meant to reduce their demand on the Age Pension? Stopping that is a major suggestion, but, will govt. have the guts to implement it?
    Add increasing the borrowing ratio (higher deposit) and you might just have the catalyst for that double whammy, or, push first home buyers further out of the market!!
    Why did bank shares jump AFTER the report??
    MICK
    8th Dec 2014
    9:43pm
    I agree.
    I was appalled that SMSFs were allowed to borrow and gamble. That is the wrong way to go with retirement benefits.
    The problem is not increasing house prices. The problem is that there are not enough houses are being built...which is driving up the price of existing stock. The remedy is cutting red tape (stamp duty and the costs of compliance with moronic councils) and releasing more land.
    Don't know why bank shares jumped. Maybe it was a sigh of relief that Murray did not recommend cutting out negative gearing as this would have hurt banks.
    Tom Tank
    8th Dec 2014
    11:42am
    It might be quite a challenge for a Government who by their actions always cosy up to the big end of town.
    A dramatic re-jig of the taxation system is long overdue to try to bring some element of fairness so that all sections of the community pay their fair share. Howard managed to skew the system to favour the well off at the expense of the ordinary person in the street.
    SMSF's should not be allowed to borrow against their superannuation, negative gearing really should go, the use of family trusts need to be curtailed etc.
    This is all apart from the Banks and their predatory actions.
    Perhaps a good starting point would be the elimination of bonuses to senior management as the accumulation of these bonuses could very well distort the efficient running of an organisation in order for a CEO to maximise their bonus. We have seen this happen before.
    I won't hold my breath on anything worthwhile happening given the unbelievable turmoil in the LNP at the moment.
    MICK
    8th Dec 2014
    12:38pm
    Be real careful about the tax system Tom. Whilst I agree with you we should remember that the Hockey budget had new taxes for all of us whilst the company tax rate was dropped by 1.5%. Even after this windfall the business lobby has kept up the relentless media bleating that they are paying too much and need tax reform. What the big end of town never mentions whilst they demand equal remuneration with our American counterparts is that in America the company tax rate is 35%...not 28.5% as it will be if Hockey gets his budget through.
    Your last sentence is of course a realisation that the big end of town rarely ever loses out and that many of the perks are not going. The only thing which is going to shake the rorts out is a great government or a full blown depression.
    Young
    8th Dec 2014
    11:49am
    Until reports are acted upon by independent non-political committees,who would then instruct governments what to act upon,very few recommendations will be pursued.
    Political parties need to act for us,not for future power.
    MICK
    8th Dec 2014
    12:44pm
    Governments rarely bite the hand that elects them...although this government and its Commandant are doing a good job of it. Such is arrogance and complacency.
    One of the reasons I continue to plug away for Independents is that I realised many years ago that both sides are little more than prostitutes who say anything to get votes and then do an about face when elected. If one looks at who tackles the hard issue it is often Independents...whose only support seems to be via the balance of power. We need more folk sending a message to get real change in politics.
    Paddles
    8th Dec 2014
    10:09pm
    mick

    For the umpteenth time, I invite you to profile an "Independent" and explain just how they could remain "independent" as possibly a lone voice in the wilderness.

    I maintain that, in the cut and thrust of political reality, your so called "independents" will do their share of back scratching with other "independents" to further their own agenda.

    Look at the current scene where Nick Xenophon, a notional "independent" is now talking about forming his own party comprising like minded individuals (read other "independents") to have a greater say in the conduct of Government.

    Thus it ever was and ever will be. "Independents" are a pipe dream in the face of organised political parties.
    solmon52
    8th Dec 2014
    1:36pm
    All these enquiries and huge dollars paying people like Murray to do something that the govt won't change.
    Taxes such as stamp duties and state taxes were supposed to have been elliminated with gst. The budget needs to get back to line items instead of a slush fund.
    Eg. If we add a tax in cigs and alchohol with arguement to assist cancer patients and medical then that's where the tax taken should be used.
    Let's face it state govts demand that govt bodies make line item budgets so why shouldn't they do it.
    We need to make a 5th and 6th banking sector. Start with the credit union banking take the 5th and if there is enough split it and make it the 6th.
    currently credit unions are stifled by big banks because they hold the credit unions to ransom.
    They are steadily taken ownership of credit unions by blackmail. We lend you money and we take a share.
    Wake up reserve bank and do your job. They should have been made to do Murray's job within their budget as that is what they are paid for.
    unicorn
    8th Dec 2014
    5:09pm
    If only Smokin Joe could run the budget with as much efficiency we would be at peace!
    MICK
    8th Dec 2014
    9:39pm
    If Smokin Joe and his front bench colleagues were honest there would not be much opposition. But when you attack the bottom half of society whilst at the same time delivering tax cuts to the rich then you get class warfare. When has it ever been any different?
    Not Senile Yet!
    10th Dec 2014
    8:55am
    It is not the Financial sector that are ripping off the Tax Payer......it is our own governments lack of BALLS......their refusal to make big corporations pay a reasonable tax and remove some of their tax concessions.......that is really hurting the balancing of the budget!!!!
    As for the Big Banks.......when everything including wages went electronic and they controlled most of the money......all their fees for statements and cards should have been removed by legislation!!!


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