30th Nov 2017
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The letter that launched a royal commission into banking
The banks called for an inquiry and got a royal commission instead

Australia’s big four banks have written to Federal Treasurer Scott Morrison, calling for an inquiry into the banking and finance sector. In response, the Prime Minister and Cabinet this morning signed off on a royal commission just hours after receiving this letter from the CEOs and chairmen of Australia’s leading banks.

Dear Treasurer,

We are writing to you as the leaders of Australia’s major banks. In light of the latest wave of speculation about a parliamentary commission of inquiry into the banking and finance sector, we believe it is now imperative for the Australian Government to act decisively to deliver certainty to Australia’s financial services sector, our customers and the community.

Our banks have consistently argued the view that further inquiries into the sector, including a Royal Commission, are unwarranted. They are costly and unnecessary distractions at a time when the finance sector faces significant challenges and disruption from technology and growing global macroeconomic uncertainty.

However, it is now in the national interest for the political uncertainty to end. It is hurting confidence in our financial services system, including in offshore markets, and has diminished trust and respect for our sector and people. It also risks undermining the critical perception that our banks are unquestionably strong.

As you know our banks have acknowledged that we have not always got it right, and have made mistakes. Together with the Government and regulators, since 2014 we have been taking action to fix issues, and improve what we do and how we do it. We have collectively appeared before, or taken part in 51 substantial reviews, investigations and inquiries since the global financial crisis, 12 of which are ongoing. We continue to demonstrate our commitment to doing the right thing by our customers and seeking to ensure those genuinely affected by these mistakes are appropriately compensated.

A strong, well-regulated and well-governed banking system is in the interests of all Australians and is critical to job creation and fairness. The strong credentials of the banking system ensured Australians were spared the worst of the Global Financial Crisis, and have been fundamental to the ongoing performance of our economy despite global and domestic political turmoil.

We now ask you and your government to act to ensure a properly constituted inquiry into the financial services sector is established to put an end to the uncertainty and restore trust, respect and confidence.

In our view, a properly constituted inquiry must have several significant characteristics. It should be led by an eminent and respected ex judicial officer. Its terms of reference should be thoughtfully drafted and free of political influence. Its scope should be sufficient to cover the community’s core concerns which include banking, insurance, superannuation and nonADI finance providers. Further to avoid confusion and inconsistency, the inquiry must to the most practical extent replace other ongoing inquiries.

It is vital that the terms of any inquiry consider the many reviews and inquiries that have been conducted into the banking sector in recent years; the significant government and industry-led reforms that have been and will shortly be implemented; the 44 recommendations made in the Financial System Inquiry in 2014; and the broad and positive contribution that banks make to the Australian economy and to millions of customers and shareholders.

It is also important that any inquiry reports back in a timely manner so that we can have certainty about the findings and move forward to implement any recommendations. We will work hard to ensure our contribution to any process helps to further strengthen Australia’s financial services system.

Throughout this, our focus will remain on our customers. We are proud of the work our people do every day to support them. That work continues.

 

Yours faithfully,

David Gonski, AC ANZ Chairman
Shayne Elliott ANZ Chief Executive Officer
Catherine Livingstone, AO CBA Chairman
Ian Narev CBA Chief Executive Officer
Ken Henry, AC NAB Chairman
Andrew Thorburn NAB Chief Executive Officer
Lindsay Maxsted Westpac Chairman
Brian HartzerWestpac Chief Executive Officer

Is a royal commission enough to restore your faith in the banking and finance sector? Do you applaud the banks’ call for an inquiry?

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    COMMENTS

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    GeorgeM
    1st Dec 2017
    12:12am
    What nice people run these banks, so caring about the services they provide!!!

    If they are serious, they should offer to all cut their CEO salaries down to max $1Mil per year, and max 20% Bonuses based on performance KPIs designed by the Royal Commission and granted by the Customers (50%) and Shareholders (50%)!
    neil
    1st Dec 2017
    12:30am
    Will the Banks reckless gambling debts of 100's of billions of dollars trading derivatives be exposed.
    Will the public be told about APRAs current bill put to Parliament last week for the Banks to be able use all of depositors funds to "bail in the to big to fail Banks"when the S..t hits the fan when the housing bubble breaks and there gambling debts need to repaid and GFC 2 hits because of their reckless, stupid, moronic behaviour of the worlds Banking system
    Have you read the fine print on the deposit guarantee as to how much the Government will honour from each bank, think it is about 20 Billion and each of the 4 Banks has over $250B on deposit, EACH
    So how much of this will be exposed by a Government enquiry, after all the Banks, I feel own the Goverment or a dam lot of it
    Will we be told about the way they lend out money, fractional reserve Banking, you put $1 in the bank and they lend it out at a min $10++++, up to $30 pre GFC 1, and charge you 5% ++ interest, which is just plan robbery of the Australian public.
    All this information is available on the net if you are at least a little bit interested in what is really going on.
    WAKE UP SHEEPLE!!!!!!!


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